Gotbit’s multi-million dollar charges may spark FUD, but fear-driven sell-offs could trigger a swift recovery, Santiment predicts.

The recent criminal charges against Aleksei Andriunin, CEO of market-making firm Gotbit, for a $42 million crypto market manipulation scheme have sent shockwaves through the industry, though analysts suggest the eventual outcome might actually be positive for the space.

As crypto.news reported earlier, Andriunin and Gotbit face charges for inflating crypto trading volumes through “wash trading,” creating the illusion of active markets before dumping assets at inflated prices. Despite the short-term panic, blockchain analytics Santiment points to historical trends indicating that such fear-driven sell-offs often create buying opportunities for more experienced traders.

Brian Quinlivan, director of marketing at Santiment, highlighted in a recent blog post that “markets tend to move in the opposite direction of the crowd’s expectations, especially when fear-driven retail activity dominates the headlines.”

“While the immediate reaction might be a small dip, as news of the manipulation scheme spreads, there’s a strong likelihood that the market could absorb the panic and swiftly reverse direction.”

Brian Quinlivan

He noted that panic selling may lead to a capitulation effect, where the worst-case scenario is already priced in, setting the stage for a potential bullish reversal, creating opportunities for institutional investors and market participants.

Santiment warns that the broader crypto market could face short-term disruptions “especially those directly connected to the manipulation, like Robo Inu and Saitama.” However, Quinlivan emphasized that “moments of extreme FUD often coincide with market bottoms,” and the removal of Gotbit’s market manipulation practices could lead to a “healthier, more transparent trading environment, increasing confidence in cryptocurrency markets.”

Gotbit, which has been active since 2017, was co-founded by Andryunin and Iuliia Milianovich. Per the firm’s description, its platform-based solution was aimed at giving project founders more control over their markets. In July 2019, Andryunin publicly acknowledged that the firm’s business “is not entirely ethical” and expressed intentions to wind down its market-making operations due to challenges with strict customer identification processes.

The firm’s website listed several prominent crypto exchanges and venture firms, including Binance, OKX, Crypto.com, a16z, Gate.io, and Bybit, in its “our friends” section. However, it remains unclear if these entities have any formal connections to Gotbit.

Bitlayer, a Layer 2 platform on Bitcoin, has raised $9 million in its extended Series A funding round, bringing the total raised during the funding round to $25 million.

The Bitcoin (BTC) L2 network announced that venture capital firm Polychain Capital led the extended round, with asset manager Franklin Templeton, which co-led the first phase, returning to co-lead.

Bitlayer Labs highlighted the funding round as a key step ahead of the anticipated launch of Bitlayer V2. This version introduces a Bitcoin-native rollup leveraging OpVM, protecting state transitions through validity proofs and fraud proofs.

Commenting on the technology, co-founder Kevin He said:

“It empowers Bitcoin to seamlessly integrate into any programmable blockchain environment in a trustless manner, which will catalyze rapid development and widespread adoption of a decentralized application ecosystem based on Bitcoin’s substantial liquidity.”

Advancing Bitcoin’s L2 ecosystem

The latest investment follows Bitlayer’s $5 million seed round closed in March 2024 and the $11 million Series A round in July. Since launching its mainnet V1 on April 15, Bitlayer has gained traction, and the latest funding reinforces investor confidence in the platform.

Growth metrics for Bitlayer include the deployment of more than 280 decentralized applications across infrastructure, developer tools, decentralized finance, wallets, non-fungible tokens, and gaming. Real-world assets and the metaverse are also seeing notable activity on the network.

Key partnerships have emerged with platforms like Ankr, Polyhedra, Particle Network, and Babylon. Bitlayer Labs has also teamed up with blockchain security auditor Hacken and cloud computing provider AWS Cloud.

SCB Limited, Selini Capital, and G-20 Group were among the backers in the extended round. The July fundraising received investment from Framework Ventures, Franklin Templeton, ABCDE, and OKX Ventures, among others.

CATS, a meme coin based on the TON blockchain, has witnessed a remarkable surge in its price over the past 24 hours, ahead of its listing on multiple major cryptocurrency exchanges.

Cats (CATS) has skyrocketed by 691%, climbing from $0.000067 to an intraday high of $0.00053, according to CoinMarketCap data. At press time, CATS was trading at $0.000223, still maintaining a 259% gain within a single day.

The surge in CATS’ value coincides with a massive uptick in its trading activity. Daily trading volume increased by 13-fold, reaching approximately $267,000, while the token’s market capitalization hovered around $294.4 million.

The hype surrounding CATS has pushed the token to trend on Google, driven by its popularity as a Telegram mini-app with millions of active users. It’s gaining momentum alongside other Telegram-based games like Hamster Kombat (HMSTR) and Notcoin (NOT).

Cats’ price rally came ahead of the meme coin being listed on multiple exchanges, including Bybit, KuCoin, Bitget, and Haskey, on Oct. 8 at 10:00 UTC. With these listings, community members can now withdraw the airdropped tokens they received during Season 1 of the project. The airdrop distribution was determined by various Telegram account metrics, including the age of the account, premium status, and user activity.

This event also marks the official launch of CATS’ Season 2, which is expected to bring additional developments to the memecoin ecosystem. Season 2 will introduce innovative features such as AI photo farming and unique CAT-themed profile pictures, offering further engagement opportunities for users.

Airdrop distribution and community involvement

CATS has a total supply of 600 billion tokens, with a significant portion allocated for airdrops across Seasons 1 and 2. Specifically, 55% of the total supply has been reserved for distribution, with Season 1 already allocating 30%, 180 billion tokens to active community members. 

Rewards have been structured to prioritize users with OG passes and those who engage in daily transactions, ensuring that the most dedicated participants benefit from the airdrop.

As part of its community-building strategy, the project encourages users to boost their token earnings by inviting friends and completing simple tasks, such as joining the official CATS Telegram channel.

Despite the recent rally, CATS holders could soon face a potential price drop as a large number of airdropped tokens enter circulation. Similar to other meme coins based on the TON blockchain, such as Hamster Kombat’s HMSTR, which saw a 54% price decline after its launch, CATS may experience selling pressure as users begin offloading their tokens.