A number of people have been hit by a cryptocurrency token market crash on Wednesday, some are claiming may be a rug pull, though official statements from the IronFinance team claim it was a crypto equivalent of a bank run.
The token, known as the IRON Titanium Token (TITAN), fell from over $60 on June 16 to a fraction over zero on Thursday morning, CoinGecko data shows. The token is linked to Iron Finance, a group that runs the wider IRON Stablecoin project, which aims to avoid price volatility.
On Thursday, Fred Schebesta, Iron Finance investor and founder of the Finder.com told CoinDesk the sudden crash in TITAN was caused by panic-selling by "whales"—individuals who hold large amounts of a certain token. He claimed: "TITAN's price went to $65 and then pulled back to $60. This caused whales to start selling."
Billionaire investor Mark Cuban is known to have been involved in TITAN, having mentioned the token on his blog in the past and claims he was hit. The news was soon being discussed on Twitter. Replying to one user, Cuban wrote: "I got hit like everyone else" and that "got out" at one point, though he did not specify when.
Cuban is known for his strong interest in cryptocurrency and has spoken about Dogecoin on TV. He's also positive about the future of decentralized finance, writing on his post that "there are a lot of financial institutions that should be concerned" by competition from it.
On Wednesday, it was reported that Cuban had joined the decentralized dClimate network, which has the goal of collecting and monetizing climate data, forecasts, and models. This comes amid long-standing concerns around the sustainability of Bitcoin and cryptocurrency more widely due to energy usage.
In a June 13 post titled "The Brilliance of Yield Farming, Liquidity Providing and Valuing Crypto Projects," Cuban wrote that he was a liquidity provider for the QuickSwap decentralized exchange platform, saying: "I provide 2 different tokens (DAI/TITAN) that enable QuikSwap to offer swaps between these two tokens."
On Twitter, many users have referred to the TITAN crash as a rug-pull, a type of exit scam whereby crypto developers abandon a project and leave with investors' funds. However, Schebesta claims "there was no rug pull" involved in the TITAN crash.
In their post-mortem on Medium, Iron Finance gave an explanation that it was a bank run, not a rug pull.
What we just experienced is the worst thing that could happen to the protocol, a historical bank run in the modern high-tech crypto space. Remember that Iron.finance is a partially collateralized stablecoin, which is similar to the fractional reserve banking of the modern world. When people panic and run over to the bank to withdraw their money in a short period, the bank may and will collapse.
Prior to the release of the post-mortem, Iron Finance encourage people to pull all liquidity form poos and have urged people not to buy TITAN or IRON until further notice.
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