Summary Points
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Market Manipulation Allegations: Arthur Cheong, founder of Defiance Capital, warns of widespread market manipulation in crypto, with projects and market makers allegedly colluding to artificially maintain token prices while centralized exchanges ignore the problem.
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Warning of Market Instability: Cheong describes the crypto market as increasingly "uninvestable," with a "black box" system hindering genuine price discovery and reducing trust in altcoin quality.
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Impact of Token Generation Events: He highlights that many tokens generated in 2025 have poorly performed, experiencing drops of 70-90% shortly after listing, leading to significant losses for investors.
- Recent Incident Raises Red Flags: Following the 90% crash of MANTRA’s OM token, suspicious pre-crash trading activity raises concerns of insider selling, further illustrating the volatile and manipulated nature of the market.
Arthur Cheong, founder of Defiance Capital, recently expressed serious concerns about market manipulation in the cryptocurrency sector. He accused projects and market makers of artificially maintaining token prices, while centralized exchanges (CEXs) overlook these activities. Cheong emphasized that this manipulation undermines investor trust.
In a post on X, Cheong described the crypto market as a “complete black box.” He stated that investors cannot distinguish between genuine market demand and price manipulation. “You don’t know whether the price is a result of organic demand and supply,” he wrote. This uncertainty complicates investment decisions.
Cheong also criticized CEXs for their lack of action against these practices. He highlighted the altcoin market’s decline in trust, which makes it difficult for investors to identify quality projects. He pointed out that many token generation events (TGEs) in 2025 have been poorly priced. Consequently, some coins have lost up to 90% of their value shortly after listing.
His comments come after the dramatic collapse of the MANTRA token, OM, which plummeted 90% in a few hours. John Patrick Mullin, a co-founder of MANTRA, attributed the crash to forced liquidations from CEXs. However, blockchain data indicated unusual transactions before the incident, with substantial amounts of OM being transferred to exchanges.
These developments raise alarms about the potential for insider selling and planned sell-offs. Similar concerns arose earlier in the year with the Libra token, which saw a massive increase in market cap before experiencing a significant drop. Argentine President Javier Milei’s support for Libra led to scrutiny, prompting an investigation into potential market manipulation.
Cheong warned that without significant reforms in the cryptocurrency industry, many parts of the market will remain risky for serious investors. He advocates for greater transparency and accountability among major players. Addressing these issues could help restore investor confidence and promote healthier market dynamics.
As the crypto landscape continues to evolve, stakeholders must remain vigilant against manipulation. Positive changes could not only protect investors but also drive innovative solutions to real-world problems within the blockchain space.
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Disclaimer
This content is for informational and entertainment purposes only and does not constitute financial or investment advice. Cryptocurrency is highly speculative and carries significant risk, including the potential loss of your entire investment. Do not make financial decisions based on this information. Consult a licensed financial advisor before investing. This site does not offer, sell, or advise on cryptocurrency, securities or other regulated financial products in compliance with SEC and applicable laws. Please do your own research and seek professional advise.
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