Gotbit Admits to 70% Token Dump of WATER

Gotbit Hedge Fund, the market maker (MM) for the meme token WATER, has addressed analysts’ concerns by admitting to the deliberate crash of the asset’s price.

On-chain analysts are worried about the “team” sales of $WATER tokens. However, most of these sales were conducted by Gotbit as part of MM operations. Why did we sell and what GHF is doing with $4M profits from these sales?

Read in the thread below pic.twitter.com/zI6QhWsroQ

— Gotbit Hedge Fund (@gotbit_io) June 27, 2024

When the coin launched on June 24 on DEX Raydium, its price surged by 83% before plummeting by approximately 70%.

“On-chain analysts are concerned about the team’s sales of WATER tokens. However, most were conducted by Gotbit as part of MM operations. Why did we sell and what will we do with the $4 million profit from these sales?” the company representatives questioned themselves.

According to them, “snipers are vampires who insult the community.” They claimed the initial pump was caused by several independent traders who bought the token right at launch using additional software.

Thus, Gotbit decided to “take money from the snipers, maintaining the price two to three times above the presale price.”

“The MM’s task was to provide equal opportunities to all investors who bought the token at the presale. Maintaining the WATER price at a market cap of $500 million would have led to queues for sales among presale participants who spent 180-200 SOL,” the company explained.

The market maker also took this step to “protect the community from volatility,” whose members might “mistakenly buy the token at an FDV of over $1 billion,” that is, before the pre-market traders sold. According to the team, such a situation would have led to losses of 90%.

Gotbit even attached a chart to their post, marking the sales and purchases of WATER.

“To protect the community, we lowered the price to a fair level,” the firm emphasized.

For operations, the MM used funds allocated within the project’s tokenomics for “liquidity and exchanges.” They sold tokens worth $4 million “at average quotes with a capitalization of $300 million.”

After reaching the pre-market price, Gotbit began supporting the asset’s price. In their view, “weak hands” sold their tokens at break-even, without harming the community.

“There was no guide on how to properly create a large pre-sale project in the market, ensuring that all investors could exit with claims. There wasn’t before. Gotbit developed it. The launch of WATER proved it. Follow us to learn more about market making,” the company representatives concluded.

However, the community did not appreciate the MM’s manipulations. Some users called on the U.S. Securities and Exchange Commission (SEC) to pay attention to the incident.

Is @SECGov around? There is some fines to hit, money to be made and thrown these clowns in jail.

— Holy Bif (@holybif) June 27, 2024

“Is the SEC around? Some fines need to be issued, money to be made, and these clowns thrown in jail,” wrote a commentator under the nickname Holy Bif.

Others questioned how investors could be protected by dumping their own tokens.

In May, the WSJ reported that Binance overlooked market manipulation by the market maker DWF Labs.

In April 2023, the company was already suspected of dumping tokens from its portfolio projects worth at least $65 million.