Block.one Suspeita de Negociação EOS Falsa durante 2017 ICO
Researchers from the University of Texas, led by Professor John Griffin of the McCombs School of Business, conducted a joint analysis with Integra FEC. They tried to find out if fictitious trading was used during the ICO Block.one, held from 2017 to 2018, to artificially inflate the volume of transactions with EOS.
According to the research paper, the researchers speculate that EOS used fictitious trading on the major cryptocurrency exchanges Bitfinex, as well as Binance, to artificially inflate the price of the token. Fictitious bidding assumes that an entity interested in raising prices is acting as a buyer and seller of the same asset, which makes it safe to call this approach market manipulation. At least because the artificially generated demand creates the illusion of demand for tokens among investors and significantly increases their value.
As a result of the research, 21 accounts were found that were “recycling” EOS tokens during the ICO. The funds involved in this exceeded 1.2 million ETH, equivalent (at the exchange rate of that time) to $815 million. At the same time, Ethereum became the only token used by manipulators to acquire suspicious volumes of EOS tokens while Block.one was conducting its ICO.
Integra FEC specialists emphasized that the behavior of the “suspicious addresses” they analyzed on Bitfinex and Binance is unusual in that institutions rarely use the services of unsecured exchanges to hold huge amounts of cash in digital currency equivalents. They mostly use cold cryptocurrency wallets.
In the course of multiple acquisitions of EOS, a significant portion of ETH tokens were recycled by converting them into contributions received as part of the ICO and then passed through multiple accounts in an attempt to obfuscate the trail. The final “destination” for these funds were wallets on the Bitfinex exchange. The 2.89 million Ethereum tokens (about 39% of the total ETH volume) received during the crowd sale are also easily tracked from addresses associated with ICOs to addresses on Bitfinex. According to the authors of the study, by the end of the crowd sale, suspicious addresses accounted for almost 1/4 of the total purchases of EOS tokens.
It is worth noting that the researchers do not intend to accuse Block.one of any kind of wrongdoing. In addition, in their report, they indicated that at the moment there is no evidence of their involvement in "bidding hype."
In their July 2021 report, lawyers at Clifford Chance stated that they had not found Block.one acquiring EOS tokens in the primary market. Although earlier Block.one was forced to transfer a fine of 24 million to the SEC, as the regulator accused them of violating legislation related to securities.
This is not the first time John Griffin has explored the crypto industry. In 2019, he authored “Is Bitcoin Really Un-Tethered?” in which Griffin attempted to highlight fictitious trading in USDT stablecoins to manipulate the value of the main cryptocurrency in the market during the 2017 bull rally.
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