Crypto Chaos: DeFiance Capital's Arthur Cheong Blows Whistle on Rampant Price Manipulation

Insider Deals and Fake Prices Rocking the Crypto World

Hang onto your wallets, folks! Arthur Cheong, the big brain behind DeFiance Capital, is sounding the alarm on a scary trend sweeping through the crypto markets. We're talking about price manipulation so bad it's shaking investor trust to its core, especially after the wild crashes of Mantra and Story Protocol tokens.

On April 14th, Cheong took to X to spill the beans, saying projects and market makers are teaming up behind closed doors to keep token prices artificially propped up. He's worried that in this murky market, "you don't know whether the price is a result of organic demand and supply" or just a bunch of shady deals.

Cheong didn't hold back, calling out centralized exchanges for turning a blind eye to the problem. He says it's creating a "lemon's market," where the insiders make bank while investors are left holding the bag. And get this - most of the recent token launches have been total flops, with prices tanking 70-90% right after hitting the market.

Cheong's not mincing words: "The biggest problem plaguing the liquid crypto market now is the complete blackbox of how projects and market makers can work together to create an artificial price that can sustain for a very long period. You don't know whether the price is a result of organic demand & supply…"

He's convinced that unless the industry cleans up its act, a huge chunk of the crypto market will stay "uninvestable." Yikes!

Cheong's warning comes hot on the heels of Mantra's (OM) token losing a whopping 90% of its value in less than a day, vaporizing over $5 billion in market cap. Crypto sleuths noticed that Mantra had shuffled millions of OM tokens to OKX right before the crash, but Mantra's denying any funny business.

With 90% of the token supply in the team's hands, a lot of people think this was a classic case of insiders cashing out while making it look like a market event. Mantra's CEO is sticking to their story, blaming the crash on CEX liquidations.

But wait, there's more! As the Mantra drama was unfolding, Story Protocol's (IP) token took a 25% nosedive in just an hour, dropping from $4.24 to $3.02 before bouncing back a bit. And guess what? The same exchanges linked to the OM crash, Binance and OKX, were behind most of the trading action.

Binance is pointing fingers at forced liquidations, while OKX is talking about tokenomics changes and sketchy exchange deposits. With all these conflicting stories, it's no wonder people are crying manipulation.

And it's not just the centralized markets feeling the heat. Last month, some slick trader on Hyperliquid pulled off a $5 million short on the JELLY token, then self-liquidated by pumping the price on-chain, leaving Hyperliquid's vault to eat the loss.

Oak Security's Dr. Jan Philipp Fritsche called it "a textbook case of unpriced vega risk," showing how even without technical bugs, DeFi's design flaws can still be exploited by crafty manipulators.