‘We Checked Ourselves’: ZachXBT Slams EdgeX After Accidental Token Collection

The crash comes amid concerns over DeFi security following recent exploits against bridges and liquidity pools.

The EDGE token fell to around $0.40 on June 1, less than two weeks after reaching an all-time high of $1.54.

The crash wiped out 51% of the token’s value in a single day, costing more than $6.2 million on major exchanges and prompting accusations against chain researcher ZachXBT as insiders.

EdgeX points the finger out

EdgeX, the decentralized perpetual futures DEX that issues the EDGE token, posted on X several hours after the crash, acknowledging what it called “sudden and irregular price movements.” The team said they are working to understand what happened. Two hours later, the project made a strong statement:

“The EdgeX protocol has not been breached in any way. This is not a hack, exploit, or security breach. What we have identified so far is a deliberate attempt by some external party to manipulate the market price of EDGE.”

It added that the company is working with the relevant exchanges and forums to identify the cause and establish accountability. He promised to provide more detailed information when said investigations are completed.

However, their explanation was not well received everywhere, ZachXBT, an on-chain investigator known for calling out bad actors in crypto, pushed back directly and it appears that the EDGE supply is under the control of a small group that floats low. Teasing the project’s self-examination suggested disclosure, the platform’s partners and market-maker agreements were also tested by the EdgeX team if they were concerned about transparency.

“We investigated ourselves and although we monitored the entire supply, we found no culprit.”

On the price side, the damage was high, with data from CoinGecko showing that EDGE fell from $1.26 to close to $0.40, a new record low, before stabilizing around $0.62 at the time of writing.

Additional data from CoinGlass shows that the drop in price resulted in liquidations of about $6.2 million in 24 hours, with long positions at $4.84 million. That activity was largely focused on Binance, Bybit, and OKX, which together handled most of the forced shutdowns that affected at least 3,840 traders, with price volatility reaching 74.77 percent on the day.

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Difficult times for Crypto security

When most people see the EDGE feature in the market, they immediately think that the parent platform has been hacked and there is a good reason why EdgeX has come out to deny the existence of such an event.

This year, the crypto space has been rocked by a number of exploits, including the recent attack on DxSale, where more than 1,400 liquidity pools were dumped with $7.3 million worth of tokens tied to old contracts on the BNB chain. One hacker stole about $11 million from Verus Bridge, while TrustedVolus, a liquidity provider, lost less than $6 million.