Bollywood A-lister-backed GARI token plunge sparks rug pull rumors

GARI token was launched by Salman Khan, an A-list celebrity from Bollywood, with an aim to help Indian creators monetize their content over a short video application Chingari.

The domino effect of the 2022 bear market, which saw the downfall of numerous crypto ecosystems and tokens over several months, caught up to GARI token as it tanked over 83% in value in a matter of hours on Monday. While GARI Network brushed off the development as a “market event,” investors suspect a rug pull event. 

GARI token was launched by Salman Khan, an A-list celebrity from Bollywood, with an aim to help Indian creators monetize their content over a short video application Chingari and its nonfungible token (NFT) marketplace. Data from Cointelegraph Markets Pro and Trading View show that GARI maintained a fairly steady value, averaging out to roughly $0.60 over the past six months amid a shaky market.

GARI’s bearish movement began on June 20, however, its long-standing support gave away on June 4 when the token crashed 83.29% to its all-time lowest trading value of $0.13. Soon after, investors started comparing the situation to the Terra (LUNA), now rebranded Terra Classic (LUNC), and TerraUSD (UST) collapse, with one of the members calling the actor “Salman Kwon.”

#kucoin is the Big Whale who is dumping #Gari they are big investor. #kucoin gari price is $0.029 while other exchange have average $0.10 be careful from kucoin guys #KuCoin #SalmanKhan #gari #chingari #cryptocurrencies #scam pic.twitter.com/EeohogM4EY

— Ashish Gautam(Money Guru Digital) (@Moneygurudigi) July 4, 2022

Speaking to Cointelegraph, KuCoin CEO Johnny Lyu shed light into the matter by providing details about the series of events that led to the recent price movement of the GARI token. Lyu explained:

In the initial stage of the dumping, the price was lower at KuCoin because we are the biggest and most liquid market for GARI, most traders chose to sell here.

During the temporary price difference, GARI investors began “buying low at KuCoin and selling high elsewhere,” added Lyu. Taking further control of the situation, GARI Network conducted an internal evaluation and found no evident hacks that could topple the token’s prices, stating:

“So far this looks like a market event. We assure our community that ALL tokens are safe in the respective reserves.”

The team also revealed being in talks with Indian crypto exchanges to assess the situation further. Reassuring investors of no involvement in GARI's volatility, Lyu added that "we are still checking more trading details to find if there's anything abnormal. KuCoin, as a neutral platform, has nothing to do with this price movement."

Additionally, GARI network also planned to host an AMA session to clarify doubts and improve investor sentiment. However, the spectators were welcomed by a 404 error when they tried to join the session.

Link not working

— Ran NeuNer (@cryptomanran) July 5, 2022

While previously speaking to Cointelegraph, Chingari's spokesperson said that the GARI tokens are used to “connect and transact with their counterparties, place governance votes, and catalyze platform engagement and user base growth." Considering that not even the backing of an A-list celebrity from Bollywood could save GARI token from the wrath of the bear market, investors are advised to make informed investments upon due diligence. In other words, do your own research (DYOR).

GARI Network has not yet responded to Cointelegraph's request for comment.

Related: Indian crypto trading volumes slump following hefty taxes

Soon after India enforced its new crypto tax law, which requires investors to pay a 1% tax deduction at source (TDS) on every transaction, crypto exchanges reported a massive slump in trading volumes.

Indian Crypto exchange's trading volume have plunged by 90-95% , 3 months after new crypto laws became applicable.

Based on current volumes - Exchanges are only able to generate trading fee revenue of $1000 to $3000 Max.

Bitbns seems to be still doing well.

Tough times ahead. pic.twitter.com/KNDbea9BCn

— Crypto India (@CryptooIndia) July 4, 2022

CoinDCX, India’s first crypto unicorn reported a 90.9% decline in daily trading volumes while crypto exchange BitBNS witnessed a 37.4% drop.