According to a report, after FTX listed the crypto tokens that were held by Alameda Research, the sister trading company of the crypto exchange, there was a significant rise in the activity of Twitter bots.
The report was published by Network Contagion Research Institute (NCRI), which is a cyber-social research and analysis organization.
It was suggested in the report that ‘bot-like’ accounts were responsible for a substantial amount of chatter that was associated with the coins that were listed before the collapse of the crypto exchange.
Almost 3 million tweets were examined in the report from NCRI that were made between January 1st, 2019 and January 27th, 2023.
The tweets that mentioned the 18 different tokens, which had been listed on the FTX crypto exchange, had been specifically examined in the report.
These were the tokens that the exchange had advertised officially through its Twitter account. According to the report, after the tokens were listed on the exchange, there was a rise of 20% to 50% in the chatter surrounding them.
But, what is interesting to note is that this was mostly ‘inauthentic chatter’. However, it remains unclear whether the same phenomenon existed for other exchanges like Binance and Coinbase as well.
A newly introduced meme token called PEPE, which is not related to FTX, Alameda Research, or Sam Bankman-Fried, was also examined by NCRI.
According to the report, the bot-like activity may not have been a side effect and could actually have been a driver of the price dynamic of the meme coin.
EarthWeb is a technology research publication and its Editor-in-Chief, Jason Wise, said that the problem with this ‘inauthentic chatter’ about a token is that it gives the impression of increased activity and interest.
Therefore, people are led to believe that the token in question is gaining momentum. In a number of cases, this leads to a temporary increase in the price because of the Fear of Missing Out (FOMO).
More and more people turn towards the token because they do not want to miss out.
The report also explained in detail that inauthentic activity on social media is actually one of the tools used for market manipulation.
NCRI stated that the public, platforms, as well as regulators, need to come up with methods for identifying and then combating such market manipulation strategies.
According to Wise, the mentioned situation could actually be an effort to use this tactic for manipulating the market.
This activity can be considered as a violation of regulations by regulatory bodies like the Securities and Exchange Commission (SEC).
The regulations are aimed at preventing market manipulation by ensuring transparent and fair trading practices.
In conclusion, the report said that the ‘scam activity’ that had been identified had resulted in losses worth ‘billions of dollars’.
When Elon Musk first disclosed his intention to buy Twitter, the billionaire said that he wanted to defeat spam bots.
In order to deal with the issue, they had begun charging for the Twitter API service, which costs up to $42,000.