I'm Trading Inside - come on in!
In the realm of cryptocurrency, the term ‘insider trading’ takes on a new dimension. It refers to the act of using privileged information to make market moves based on events that are yet to become public knowledge. While this is illegal in the traditional financial world, the crypto industry faces challenges due to its relatively unregulated environment.
Let’s delve into the early token allocation process and the key players involved:
Project Team: The heart of any project, the developers and founders are often allocated tokens as a reward for their dedication and hard work.
Early Seed Investors: The financial fuel comes from these backers, including venture capitalists and angel investors, who are typically rewarded with early token allocations.
Advisors and Consultants: The brains providing strategic guidance often receive tokens for their invaluable contributions.
Influencers: The voice that echoes across the community, influencers are allocated tokens for their role in amplifying the project’s reach and potential success including future promotions for the project.
These early allocations, while standard, can lead to insider trading if the knowledge is used for trading before it becomes public. The crypto market’s lack of stringent regulation compared to traditional finance makes it difficult to monitor and prosecute such activities.
Let me ask you, if you received a huge allocation as a developer who is part of the project, what would be the first thing you do on launch day?