Plasma Founder Denies Insider Selling as XPL Token Falls Over 50%

Plasma’s founder, Paul Faecks, has denied any insider selling after the project’s XPL token plunged more than 50% in value within days of its launch.

• Plasma’s XPL token dropped over 50% after launch, sparking insider sale rumors.
• Founder Paul Faecks said all team tokens are locked for three years with a one-year cliff.
• Community investigators alleged over 600 million XPL tokens were moved to exchanges.
• Faecks denied any links with Wintermute, the trading firm blamed by users.
• Critics claim the team may have sold ecosystem and growth tokens instead.

Plasma, a new layer-1 blockchain designed to make stablecoin payments faster and cheaper, faced major controversy after its token XPL lost over half its value just days after launch.

Founder Paul Faecks responded to accusations of insider selling, saying that no team members had sold any tokens and that investor and team allocations remain locked for three years with a one-year cliff. He stressed that speculation about insider selling was false and that the project’s focus remains on building long-term value.

Plasma officially launched its mainnet beta and XPL token on September 25, with prices peaking near $1.70 on Sunday before falling to $0.83 by Wednesday — a drop of more than 50%, according to TradingView data.

Following the sharp decline, community members began analyzing onchain data. One user, ManaMoon, claimed that the team’s vault wallet sent over 600 million XPL tokens to exchanges before the launch, suggesting a time-weighted average price (TWAP) selling pattern — an algorithmic method used to sell large amounts gradually.

Another user, crypto_popseye, accused the Plasma team and trading firm Wintermute of contributing to the token’s crash, saying they had “destroyed the chart and momentum.”

In response, Faecks denied any connection with Wintermute, clarifying that Plasma had never hired the firm for market-making or trading services. “We have the same information as the public on Wintermute’s ownership of XPL,” he said.

However, some community members questioned Faecks’ wording, suggesting that while he ruled out team token sales, he didn’t clarify whether ecosystem or growth tokens were sold instead.

Despite growing speculation, Faecks stated that the team remains “laser-focused on building the future of money” and declined to make further comments.

Final Thought

The Plasma XPL controversy underscores the importance of transparency and clear token distribution in maintaining investor trust in new cryptocurrency projects. While the founder insists no insider selling took place, community concerns and unanswered questions continue to weigh on the project’s reputation.