In an unfortunate turn of events for supporters of the DeFi Money Market Foundation, the DMM token plummeted in value as the team behind it revealed they cease all operations due to regulatory concerns.
DMM Ceases Operations
The DeFi Money Market used to be a loans platform and it received some serious attention within the cryptocurrency community. One of the reasons – it was a hot DeFi project backed by some serious names, including Draper Goren Holm – a partnership between Tim Draper, Alon Goren, and Josef Holm focused on investing in blockchain solutions.
Unfortunately, supporters of the project received the bad news today as the team behind DMM announced an immediate halt of operations.
As a result of regulatory inquiries, DMM is shutting down. Effective immediately, mToken minting is no longer available. mToken redemption will remain available indefinitely, though the interest rate on mTokens will drop to 0% on or about February 10th, 2021. Capital and interest are currently available to fund redemption of all outstanding mTokens plus accrued interest. – Reads the official website.
Nevertheless, the community is taken ablaze as many have lost massive chunks of value because of what happened to the price of the protocol’s governance token – DMG.
DMG Price Tanks 90%
The price for DMM’s governance token, DMG, crashed 90% in less than 60 minutes. It went from above $0.5 to around $0.05. The markets are still open so there’s a slight recovery but it definitely doesn’t look good for people who failed to dispose of their tokens in time.
Commenting on the matter was popular swing and scalp trader Devchart.
This is the true definition of messed up.
They literally pumped it. pushing a lot of people to jump on trades, and then dumped and then announced that they were going out of business.https://t.co/hGXsQAsT9O
— Devchart 👨🏻💻 (@devchart) February 5, 2021
FTX, one of the exchanges where DMG was trading with leverage also shed some light on the events.
Sad to see what happened with DMG today.
We’ll keep the DMG market open, might as well let people trade out if they want. Leverage will probably be reigned in quite a bit.
We don’t know of any nefarious things that happened but will investigate given the unusual price pattern.