Avalanche Crypto News: What’s Going On With The Scandal Surrounding AVAX? – Forbes
First, let’s walk through a little bit of backstory on AVAX.
Avalanche is a cryptocurrency and blockchain platform set up to rival Ethereum. Within the Avalanche blockchain, AVAX is used as the token to support a suite of blockchain projects, such as tracking smart contracts.
After launching in 2020, the Avalanche platform has positioned itself to become a fast, affordable, and secure way to process transactions. Although the platform can continue to create AVAX coins up to the 720 million token cap, the rate at which tokens are minted is impacted by the votes of current AVAX holders.
AVAX is used to secure any transactions that take place on the Avalanche network, but you can purchase the tokens on any major cryptocurrency marketplace.
Cryptocurrency investors aren’t strangers to market volatility. In fact, you could make the argument that cryptocurrency is one of the more volatile asset classes out there. After hitting an all-time high of $146.22 in late 2021, the value of AVAX has plummeted. As of mid-September 2022, AVAX is trading at $19.49. That’s a loss of 87.6%.
The value of an AVAX token is tied to the usefulness of the Avalanche platform. If people want to use the Avalanche platform, AVAX tokens rise in value. On the flip side, if the platform becomes obsolete, or just unpopular, the AVAX token likely wouldn’t be as useful for an investment portfolio.
Here’s a look at the latest headlines and how this information could impact the value of AVAX.
In August 2022, a self-proclaimed whistleblower called Crypto Leaks, released a report that included detailed allegations against Ava Labs, which is the company behind the Avalanche blockchain. Within this report, Crypto Leaks accused Ava Labs of shady back-door deals designed to weaponize the power of litigation against other platforms.
Specifically, the report outlined a scheme that Ava Labs allegedly made with a law firm. The law firm, Roche Freedmen, was supposedly going to look into Ava Lab rivals with the intention of collecting dirt. With the dirty laundry, the law firm was supposedly going to use the information to build class-action lawsuits against these rival companies.
The Crypto Leaks report stated, “We can reveal that the pact directs Roche Freedman and their leader Kyle Roche, to: 1) use the American legal system—gangster style—to attack and harm crypto organizations and projects that might compete with Ava Labs or Avalanche in some way, 2) sue crypto industry actors generally with the aim of creating magnets for regulators such as the SEC and CFTC that distract them from the highly commercial nature of Ava Labs and the Avalanche blockchain, and 3) secretly pursue Emin Gün Sirer’s personal vendettas against individuals.”
If rival companies were facing lawsuits, that could significantly hamper their ability to compete with Ava Labs. According to the report, Ava Labs planned to reward the law firm with an extensive amount of AVAX tokens and Ava Labs stock.
After the report was published, the value of AVAX took a nosedive. Ava Labs’ CEO Emin Gün Sirer denies allegations of any inappropriate agreements between his company and the Roche Freedmen law firm.
As the allegations continue to swirl, there’s a key piece of encouraging news about the Avalanche platform.
Securitize is a digital asset securities firm that launched a fund which tokenized a portfolio of KKR’s Health Care Strategic Growth Fund II. This tokenization happened on the Avalanche blockchain.
A big goal of this tokenization is to make a pathway for individual investors to participate in private market investing. If the trend continues, this kind of tokenization can help investors dive head first into more private market investment opportunities without specialized connections or piles of cash.
If you are looking to invest in crypto, it’s possible to purchase AVAX tokens through major cryptocurrency exchanges. But when it comes to investing in individual cryptocurrency assets, it’s a good idea to prepare yourself for extensive monitoring.
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