Venice AI just launched earlier this week on the Base network, but shortly after, the VVV token plummeted by 50% due to concerns over insider trading. Two members of Aerodrome Finance are accused of buying a large amount of tokens before the information was publicly disclosed, reaping huge profits.
Promising Launch, But Faces Turbulence
#VeniceAI is an artificial intelligence platform on the Base Network, helping users access DeepSeek from China with a private security layer, uncensored and free of charge for each use.
Right after launching on Monday, the project soared to a market cap of 1 billion USD from 20 million USD, thanks to the appeal of its security features and being immediately listed on Coinbase – a rare occurrence for a new project.
Insider Trading Scandal Exposed
However, on Tuesday evening, market sentiment sharply reversed following reports of insider trading. Specifically, two members of Aerodrome Finance, the partner that launched Venice AI, were found to have purchased a large amount of tokens right after they started trading on the platform, but before any public announcements were made.
In less than an hour, their $50,000 investment had surged to $1 million, causing an uproar in the community.
Immediately, Aerodrome Finance suspended these two members and initiated an internal investigation. The project team stated:
“We detected suspicious transactions in less than 30 minutes and immediately launched an investigation. Two individuals involved were suspended within three hours of the project's launch.”
The negative impact from the incident caused the token #VVV to plummet by 50%, raising concerns about the project's transparency. The community is still awaiting the investigation results and further actions from the management team.
