A social utility token, GARI, backed by an Indian short-video platform Chingari, lost nearly 83 per cent in its value over 24 hours on July 4, according to several news reports. Many investors feared that it was a rug pull but the company rushed to clarify that the incident was not a result of a hack and a “market event”. https://twitter.com/sumitgh85/status/1544313020687568896 Why it matters: The crypto market is currently experiencing a bear run because of a global economic downturn. The bear run has resulted in several casualties, with many companies going belly-up. These incidents underscore the need for a regulatory regime for crypto because a regime is critical to usher in investor protection norms. What was the reason behind the drop: The company, in its thread on Twitter, explained that the market event was triggered by the sale of GARI tokens worth two million dollars which caused the price to drop from $0.78 to $0.14, as per CoinTelegraph. The company stated that the sell order was made on KuCoin— a crypto exchange based in Seychelles. What is GARI: It is a social utility token which helps short-form video creators on Chingari to monetise their content on the blockchain. A creator gets rewarded with GARI whenever they make a video on Chingari. The token gives creators governance authority over platform developments in the future through a DAO (Decentralised Autonomous Organisation). The token was launched by Salman Khan, a major Bollywood actor, in October last year. The price of the token was…
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