Reddit’s r/CryptoCurrency Mods Fired for MOON Insider Trading

Reddit’s 6.9 million-member r/CryptoCurrency community has fired the moderators who traded the subreddit’s native token MOON minutes before the site’s decision to end its “Community Points” program was announced on Tuesday.

“All the moderators who sold Moons before the announcement have been removed from the mod team,” r/CryptoCurrency tweeted.

Reddit shut down community points, a blockchain-based internet points program designed to reward creators and developers, on Tuesday at 13:02 EST (17:02 UTC), citing scalability issues. Users could earn and spend community points using native tokens such as MOON.

According to data compiled by on-chain sleuth Lookonchain, moderators sold 456,353 MOON, valued at $92,000, approximately thirty minutes before the announcement, having advance knowledge of the news.

Two minutes before the information, the market was flooded with an additional 363,227 MOON, adding to the selling pressure.

MOON, an ERC-20 token, is distributed as a reward to users for their posts or comments in the r/CryptoCurrency subreddit. It can be freely traded, tipped, or spent for various purposes within the community. As a result of the Reddit announcement, the token fell over 85% to $0.0198.

According to the r/CryptoCurrencyMoons subreddit, moderators were informed of Reddit’s decision one hour before. This episode highlights the difficulty of regulating cryptocurrency markets.

Many investors were outraged by the insider trading, with some calling for regulatory action against moderators and others questioning Reddit’s decision to inform moderators beforehand.

“Those who sold before the announcement must notify the SEC. Removing oneself is not an acceptable outcome for insider trading.” Bucksaway03 stated.

Lord-Nagafen stated, “At least everyone would have been on an equal playing field if Reddit had blindsided everyone, including the moderators.”

Currently, the r/CryptoCurrency subreddit is discussing the future of the MOON token.

r/CryptoCurrency stated, “u/mellon98, a core contributor and MoonsDust’s founder, has proposed a solution to the situation, and we’re brainstorming about Moons’ future while awaiting Reddit’s decision on whether they’ll transfer the contract to us or a burn address.”

“Moons are here to stay regardless,” r/CryptoCurrency added.