Pair of Reddit mods appear to have sold off tokens ahead of announcement to terminate blockchain-based program
On-chain analysts noted that apparent insiders connected to Reddit’s Cryptocurrency subreddit seem to have sold off significant quantities of Moons, the forum’s own cryptocurrency, before Reddit publicly announced plans to discontinue its Community Points program.
This announcement triggered an 85% plunge in the Moon token’s value.
Reddit, a widely-used social media platform, told users on Tuesday that it planned to end its blockchain-based Community Points system, causing the Moon token’s value to plummet from $0.25 to less than $0.03 in just one hour.
Despite claims from subreddit moderators that they had been unaware of Reddit’s impending decision, blockchain data suggests a different tale. Wallets seemingly connected to these moderators unloaded substantial amounts of Moon tokens minutes before Reddit’s announcement at 1:02 p.m. ET on Oct. 17.
Among the transactions scrutinized, several are notable. One such instance involved a subreddit moderator with the username Mcgillby, on-chain analysts Pledditor and Lookonchain first noted. This moderator transferred over 100,000 Moons through two separate transactions on the Arbitrum Nova blockchain, converting them into over $23,000 in ETH, on-chain data shows. The user subsequently deleted all previous Reddit posts.
In the past, Mcgillby had been identified as one of the top 20 Moon holders and one of the moderators. Moons, as ERC-20 tokens, can be stored in a specialized crypto wallet on Reddit known as Reddit Vault, which records all transactions involving moderators on the blockchain, linked to their wallet addresses.
Another moderator, “rider_of_the_storm,” allegedly moved 345,422 Moons — valued at over $69,000 at the time — to an exchange address just 17 minutes before Reddit’s public announcement, according to Lookonchain’s findings. This Reddit account has now been deleted.
Both Mcgillby and rider_of_the_storm have sold off tokens worth over $92,000. The two users appear to have been removed from moderator roles on the subreddit. Currently there are 10 other moderators supervising the subreddit.
Lookonchain stated that on-chain data indicated that of the several moderators managing the cryptocurrency subreddit, at least three liquidated tokens with potential inside information 20 to 30 minutes prior to the public announcement.
Moderators were given 1 hour prior notification
The subreddit moderators issued a statement at 1:07 p.m. ET from their shared account five minutes after Reddit’s public announcement, indicating they were informed about the discontinuation of the Community Points program just one hour before it went public.
However, the rapid succession of on-chain transactions following this internal notice suggests that some moderators may have rushed to offload their Moon token holdings before the information was publicly disclosed.
A Reddit spokesperson did not immediately respond to a request for comment.