Intern Report: Polygon Executives Accused of Manipulating Meme Coin Price
The crypto market is no stranger to scandals, and even well-known projects are not exempt. Last night, a Twitter account claiming to be an intern of the Polygon community, @Rahul__Ghangas, posted a 34-part exposé on Twitter, alleging that Polygon executives colluded with external individuals to manipulate the profit of the meme project ELECOIN, and accused them of misleading and exploiting community developers.
The article included numerous screenshots of chat records, adding credibility to the exposé and accusations. Deep Dive summarized the entire incident based on the information in the article.
Whistleblower Exposes
Rahul began the article by exposing the main individuals involved in the event through a screenshot of a Telegram group chat:
– @0xkenzi: Kenzi Wang – Symbolic Capital Partner, Polygon Advisor
– @jack_venture: Jack Lu – Co-founder of multibit and bouncebit, Partner at @NGC_Ventures
– @sourcex44: Sanket Shah – Strategic Manager at Polygon Labs
– @0xsachi: Sachi Kamiya – Initial Team Member at Polygon Ventures
– @mscryptojiayi: Jiayi Li – Co-founder of Salus Security
– @shawncgeek: Shawn Chong – Operations Director at Salus Security and investor in BounceBit
The spark of the incident began with the collaboration of Polygon team executives, VC partners, and project co-founders in creating a meme scheme. The provided screenshot in the article showed that the internal team was preparing for the official promotion of ELECOIN, including discussions on chip distribution, personnel statistics, and meme narration in the Telegram group. It was evident that they were preparing for the scheme.
Meme Scheme Plotting
On January 3, 2024, many key opinion leaders (KOLs) gathered in a Telegram group to plan the promotion of the meme coin ELECOIN under the name “Indian Meme.” Rahul, the whistleblower, stated in the tweet that the token had already undergone a “secret TGE” at the end of 2023, and most of the token supply had been acquired by insiders. The project also promised to pay developers and KOLs for their work as soon as possible in the form of USDC.
The team planned to use Sandeep, the founder of Polygon, and his pet elephant as a medium to promote the story of ELECOIN. They hoped to generate hype for ELECOIN by releasing photos of Sandeep’s pet elephant. This idea received support from “top-level individuals” at Polygon. Rahul sarcastically remarked, “This plan sounds absurd, but people will still buy into such stories during a bull market.”
Advancement of the Plan
After finalizing the plan, the team actively promoted the project through various social media channels, aiming to reach 5,000 followers as soon as possible.
On the first day of the project, an obvious problem arose: the team had not paid developers and marketers for their promotion and project development. They had been relying on the personal funds of developers and marketers. Rahul joined the project later and was responsible for a small portion, mainly assisting with the development of the ELECOIN website. He revealed that he had been granted access to the ELECOIN domain by Polygon advisor Kenzi Wang, confirming Wang’s identity through other channels.
Since Rahul was not removed from the group chat after delivering the project, he witnessed firsthand for the next three months how “wealthy individuals manipulate and deceive others without any cost, using their time and money for personal gain.”
The Show Begins
In the first few days of the project’s promotion, the team faced early participants selling off their holdings. The team tried to maintain the appearance of ELECOIN being a reliable and stable project by actively repurchasing tokens. As the project progressed, the highlight of ELECOIN promotion arrived: the team planned to tag Sandeep on Twitter and “attract” him to participate in the project to generate traffic and grow the community.
Of course, all of this was planned in advance, from Sandeep’s initial interaction with the official ELECOIN account to him changing his Twitter profile picture to the meme of the elephant (similar to when the founder of Solana changed his profile picture to SillyDragon, causing the price of Silly token to rise). The article’s author believed that every step of the event’s development had been carefully designed by the ELECOIN and Polygon high-level teams.
Exposed
After a series of meticulous planning, ELECOIN successfully gained the desired attention. However, this was followed by three months of continuous selling pressure from early participants. No one could blame the project insiders for the sell-off because the early wallets were created before the launch of $ELE and the funds came from exchanges.
Facing the relentless sell-off, developers and the marketing team continued their work with the hope of receiving the promised rewards and seizing the “big opportunity.” They participated in the project’s development without compensation, with many even funding the project maintenance themselves.
One night, the situation took a sharp turn as there was a massive sell-off of $ELE tokens. In less than two weeks, the total market value plummeted from 170 million to 2 million. All the early participant wallets started selling off, and team members who had been working without compensation finally erupted.
Although these early participant wallets were carefully managed, some traces were discovered: some addresses were linked to Jiayi Li and Shawn Chong, the co-founders and CEO of Salus Security mentioned at the beginning of the article. It was clear that the sell-off came from within.
In response, Jiayi Li claimed that the internal sell-off was due to internal conflicts within the initial team. She pledged to repurchase some tokens in her personal capacity and provide $5,000 as a market budget.
Rahul sarcastically mocked Jiayi Li’s statement in the tweet, saying, “How generous!”
From the planning stage to the discovery of internal sell-offs, although we currently cannot confirm the authenticity of these chat screenshots, the exposé itself indicates a clear connection between Polygon high-level executives and external individuals manipulating ELECOIN.
After revealing the whole incident, Rahul also publicly accused Polygon advisor Kenzi Wang and bouncebit co-founder Jack Lu, openly stating their past and ongoing fraudulent activities.
Rahul stated, “If bad actors are not held accountable, the web3 ecosystem will not be able to realize its transformative potential… We need to cultivate a culture of transparency, integrity, and respect. When high-level executives abuse their positions for personal gain, they must be held responsible. Using others for personal profit goes against the spirit on which this industry is built.”
Conclusion
As of now, no one involved has provided an explanation or clarification regarding Rahul’s lengthy exposé and accusations. The price of $Matic has not shown significant fluctuations in response to this scandal, perhaps because the incident has not yet gained widespread attention, or maybe the market has become desensitized to such wrongdoing that does not directly affect them.
There is nothing new under the sun. The meme craze, fueled by financial nihilism, was originally intended to resist fraud and manipulation hidden in the shadows. However, the hands of wrongdoing seem to have reached this field as well. The meme, which claims to be about freedom, fairness, and culture, has not escaped the manipulation and scheming of interest groups.
The meme coin in your hands may not represent “your freedom,” and the pump you see may be the result of manipulation by interest groups.
As the “grass stage team theory” continues to unfold, players should gradually become skeptical of any top-tier projects and demystify them.
In the crypto world, cherish your journey and proceed with caution.