Crypto’s chronic insider trading problem is expanding from token launches to digital asset treasuries (DATs), as investors exploit early knowledge of upcoming corporate coin purchases.
The issue runs deeper than a few bad actors, according to Shane Molidor, founder and CEO of the blockchain advisory firm Forgd. He described insider-style behavior as a structural feature of crypto markets, where prices often detach from fair value.
A veteran of both Western and Asian trading desks, Molidor told Cointelegraph that many of crypto’s early institutions still treat regulation as an afterthought. “In the West, it’s ask permission rather than forgiveness,” he said. “In the East, it’s move fast, make as much money as possible and deal with the consequences later.”
Molidor previously held leadership roles at crypto exchanges AscendEX and the Winklevoss twins’ Gemini. He led trading at market maker FBG Capital in China before launching Forgd. The company, which calls itself a Web3 investment bank, advises on tokenomics design, market maker relationships and exchange listings.
As DATs gain traction, the same market dynamics driving insider behavior in token trading are now surfacing in institutional products, Molidor warned.
“Even a small amount of buy-side demand can have a huge market impact when the assets are illiquid,” he said. “It’s a virtuous loop — until it isn’t.”
The mechanics behind crypto’s engineered launches
In crypto, new token listings prioritize spectacle over fair market discovery, according to Molidor, who explained that stakeholders in the listing process — exchanges, market makers and token issuers — are “self-interested and profit-motivated.” That dynamic, he said, shapes how new assets are introduced to retail traders.
Exchanges can underprice tokens and keep liquidity thin at launch, so even small bursts of buying from retail users push prices higher. “They’re incentivized to curate prices to go up and to the right,” Molidor said. “They can accomplish this through lesser-known tactics, like purposefully underpricing a token launch at TGE or layering thin liquidity.”
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Retail traders interpret the early green candles as signs of strength and rush to buy in, unaware that their own orders are what’s driving the surge. “Everyone thinks they’re getting a fair and reasonable cost basis, but they’re not,” he said. “They’re buying all-time highs and then catalyzing a very poor user experience thereafter.”
According to Molidor, this cycle benefits exchanges most. Each listing creates a new round of volume, headlines and user activity, even if prices collapse soon after.
“It’s just a marketing ploy,” he said. “They like to say, ‘The new asset we gave you early access to is now trading at a 10- or 20-times premium,’ but there wasn’t fair and efficient price discovery at the open.”
Throughout Molidor’s career, he observed a clear regional divide in listing processes. Western exchanges like Coinbase follow a slower and more traditional route using auction-based listings that aim for fair pricing but delay trading. By contrast, Asian exchanges favor faster launches designed to capture speculative momentum.
“Coinbase’s approach is more efficient,” Molidor said, “but it doesn’t resonate with speculative retail demographics.”
Crypto’s market tricks are appearing in crypto treasuries
The same behaviors are now emerging in DATs, or companies that buy cryptocurrencies to add to their balance sheets. Molidor said the trend has expanded from early insider-style trading in tokens through institutional products.
He explained that DATs began by accumulating large-cap coins like Bitcoin (BTC), where liquidity is deep and price discovery is efficient. But as competition increased, many of these vehicles are targeting smaller and less liquid tokens in search of higher upside.
That shift makes DATs more vulnerable to manipulation.
The process behind treasury fundraising also opens the door to front-running. During outreach to potential backers, insiders can access early information on which tokens will be purchased. This opens up chances to front-run and simply purchase the asset on the secondary market in anticipation of future price appreciation.
“Now that we’re getting into lower-valuation, lower-liquidity assets, front-running is becoming much more evident,” he added.
“What we’ve found with DATs is that the unspoken goal is often to trigger enough market impact in the underlying spot asset to drive noticeable price appreciation. That, in turn, fuels fear of missing out among speculative buyers, who then push prices even higher.”
But this feedback loop cuts both ways. Once buying pressure slows, the same thin liquidity that pushed prices up can send them collapsing. With few disclosure requirements and little connection to fundamentals, price becomes the only measure of value — and that price can be easily distorted.
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“If the price becomes our only proxy for fair value and price can be heavily influenced and manipulated by even a small amount of buying and selling, then you can have runaway capitulation,” Molidor added.
Early examples of how corporate crypto purchases can move markets were seen in 2020 and 2021, when Tesla and MicroStrategy first added Bitcoin to their balance sheets. Back then, the market was thinner and more sentiment-driven, so even modest announcements sparked sharp rallies.
Today, Bitcoin trades with much deeper liquidity and broader institutional participation, so such news barely moves the needle. Molidor said the “virtuous loop” is now more visible in smaller, less liquid assets that still react sharply to treasury or fund purchases.
Insider dynamics still define how crypto moves
The blurred line between token markets and institutional products shows how deeply speculation and information asymmetry remain woven into crypto’s core.
As Molidor sees it, the path forward is about better alignment between blockchain founders, exchanges and the institutions now flooding in. Most token projects still launch with “brilliant tech and terrible market strategy,” he said, while many institutional entrants fail to grasp the mechanics of crypto’s capital markets.
“The problem is that both sides misunderstand each other,” he said. “Founders don’t know how to operate within financial systems, and institutions don’t understand how crypto markets really function.”
The influx of institutional money may legitimize crypto in the eyes of traditional finance, but it also imports new risks from a structure that still lacks transparency.
The next phase of the market will test whether participants can evolve beyond that model.
“You’re giving exposure to something that many investors don’t truly understand,” Molidor said. “When prices reconverge with fair value, that misunderstanding becomes very real.”
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