On Oct. 18, Reddit closed its blockchain-based points program that involved the use of certain crypto tokens native to subreddits.
Reddit’s r/CryptoCurrency community has fired two moderators who were found to be involved in insider trading of the Moons (MOON) token, Cointelegraph has confirmed.
As Cointelegraph reported on Oct. 20, at least three wallets linked to Reddit group moderators dumped hundreds of thousands of dollars worth of MOON tokens on Oct. 18, just minutes before the official announcement of the closure of the blockchain-based points program that involved the use of certain cryptocurrencies native to each community. The market dump by the three wallets was highlighted by on-chain analysis accounts on X (formerly Twitter), such as Lookonchain.
1/ Three @CCMOD_ moderators dumped $MOON in advance via #inside information from @Reddit admins. pic.twitter.com/ucrPkh6siX
— Lookonchain (@lookonchain) October 19, 2023
The Reddit moderators were made aware of the closure of the blockchain-based points program an hour earlier than the official announcement. The Reddit announcement caused the token to drop by nearly 85% to $0.0198, but two moderators managed to sell just in time to make more gains than the rest of the unaware community.
Related: Reddit community tokens soar on Kraken listing
Cointelegraph reached out to r/CryptoCurrency to understand the insider trading allegations and how the investigation went through. U/mellon, a core contributor and MoonDust founder, told Cointelegraph that two moderators were removed while three others are being investigated:
“2 mods got removed, as they sold their Moons before the official announcement from Reddit: u/rider_of_the_strom u/McGillby.”
The program allowed participants on the platform to earn points and spend them using community-native crypto tokens such as MOON. In the r/CryptoCurrency subreddit, users who post or leave comments are given the ERC-20 token MOON, which they can freely exchange, tip or use for other purposes in the community.
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