Plasma Founder Denies Dumping Tokens as XPL Crashes Over 50%

Plasma founder Paul Faecks has rejected allegations of insider selling after the project’s native token, XPL, lost more than half its value within days of launch. The denial came after community investigators pointed to suspicious onchain movements, fueling speculation of large-scale sell-offs.

Launched on September 25, Plasma introduced its mainnet beta and the XPL token, a layer-1 blockchain aiming to make stablecoin payments faster and cheaper. Following the debut, XPL surged to nearly $1.70 but quickly collapsed to $0.83 by midweek, wiping out over 50% of its value, according to TradingView.

Faecks dismissed claims that the team sold tokens, stressing that both investor and team allocations are locked for three years with a one-year cliff. “No team members have sold any XPL,” he stated, adding that Plasma has never contracted with trading firm Wintermute, which was also accused of involvement.

However, community analysts raised doubts. Onchain sleuth ManaMoon highlighted that over 600 million XPL tokens were moved from Plasma’s team vault to exchanges in the days leading up to the token’s collapse. Others accused the project of using time-weighted average price (TWAP) strategies to slowly unload tokens into the market, overwhelming retail buyers.

One outspoken critic, using the handle crypto_popseye, accused Plasma and Wintermute of destroying the token’s momentum. “Plasma pretty much wrecked their chart and I hope their project fails,” the user wrote.

In response, Faecks reiterated that Plasma remains focused on building its ecosystem. Yet critics continued pressing for clarity on whether “ecosystem and growth” tokens had been sold. Despite the backlash, Faecks said the team will not issue further comments and is “laser-focused on building the future of money.”