OKX says CELT token price was manipulated; affected users to be compensated OKX says CELT token price was manipulated; affected users to be compensated
OKX froze 5 malicious accounts that were involved in the market manipulation. Over 3 million USDT will be airdropped to affected users.
2 min read
Updated: Feb. 28, 2023 at 4:46 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The price of gaming project Celestial’s native token CELT was manipulated by some malicious actors on OKX, the exchange said in its investigation report.
On Feb. 27, the price of CELT fluctuated sharply, falling around 54% in less than two hours, according to Coingecko data. This caused many to question if there was market manipulation involved from malicious traders looking for profit.
CELT price was manipulated through fake promotions
On Feb. 26, Celestial officially announced the launch of its blockchain game. The next day, a few influencers falsely promoted the game by associating the OKX brand with it, something that OKX said was “not allowed” by the platform.
OKX Ventures invested $100,000 in Celestial, and under the investment agreement, the relevant tokens will be unlocked within one year, OKX said. The said tokens are locked in the OKX Ventures account, it added. The exchange also clarified that “OKX Ventures has no relationship with the project party.” It said:
“As a neutral platform, except for OKB and OKT, OKX has no special relationship with any project parties. All publicity under the banner of OKX is false publicity.”
Driven by public concern, OKX launched an investigation into the event on Feb. 28. Celestial apologized for the “negative impact,” and said:
“We didn’t use any relationship with OKX for the promotion. All the fake promotion was manipulated by other KOLs. We will fully cooperate with OKX exchange in their investigation and accept any decisions they make regarding the matter.”
Later, Celestial also said that it will announce a large-scale buyback plan to “minimize user losses” and that the tokens acquired through buyback will be burned.
After investigation, OKX found 5 accounts that had “suspiciously” profited from the price fluctuation and froze them. A total of 714,381 Tether (USDT) was frozen while part of the illicit profits had already been transferred out of OKX. Celestial itself agreed to return 1.3 million USDT, OKX said.
OKX did not find any internal staff involved in the incident but said that if later discovered, it will be dealt with strictly.
OKX founder Star Xu said that the exchange will review its “listing standards to prevent similar shit tokens” from being listed. He also added that the OKX team may also consider delisting CELT from the platform.
Shortly after OKX published its investigation report, Celestial admitted that the market manipulation involved its own staff colluding with an external market maker. It also said that it accepts all of “OKX’s punishment measures.”
Compensation for affected users
OKX’s terms of service prohibit malicious activities such as market manipulation. In case of such activities, OKX reserves the right to return illegal proceeds to affected users.
Therefore, OKX said that it will deduct the entire balance of 2,014,381 USDT from the 5 malicious accounts. Additionally, the exchange will donate 1 million USDT from its own pocket to make users whole. Therefore, a total of 3,014,381 USDT will be airdropped to users who suffered losses due to market manipulation, OKX said.
The airdrop targets are users who bought CELT between 12 am HKT on Feb. 25 to 12 am on Feb. 28 and suffered losses. OKX added that owing to the complexity of the airdrop calculation rules and the required for statistics, it will release the exact rules of the airdrop within 2 days.
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Monika Ghosh
In 2020, Monika immersed herself in crypto, maintaining skepticism yet firmly believing blockchain could address key issues like financial disparity and transparency. A book-lover, she's also a passionate food enthusiast.
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