The Aftermath of the "Liquidate Zeus" Campaign

Posted on August 28, 2020

Feeling threatened by activist short-sellers, a typical PR tactic the publicly traded companies use is to quickly respond to the accusations by addressing them and by providing strong counter-arguments to demonstrate that they are the victim in this game. This proactive approach includes press releases, public conference calls, and meetings between the company’s management and its large shareholders, in an attempt to discredit the allegations.

Lacking the ammunition to refute our statements, Chainlink/SmartContract decided to pretend that the report does not exist. In the background, however, they mobilized each and every fictitious "partner" and paid "supporter" to discredit us mainly by attacking our legal entity and credentials.

Creating and demonizing a common enemy united their community. Proving that there is no such thing as bad publicity, Chainlink took full advantage of the large audience of the dispute. As its army of loyal followers and institutional investors stood firm behind their back, SmartContract orchestrated the most spectacular pump in crypto history. Without material technological improvements or actual user onboarding, the price almost tripled within less than a month. Lured by the rapid price appreciation, naive investors were outbidding each other.

Today, the token is trading more than 25% below its all time high. In the process, SmartContract managed to dump over 20 million USD worth of LINK mostly to new-coming retail investors fearing that they were missing out on the momentum. The aftermath reveals many of those complaining of losing considerable amounts of cash, which we doubt they will be able to recover by holding LINK.

In this article, we will take a close look at LINK’s latest pump, and examine how it turned into a tragedy for some of the community members. We divide the period since the publication of our initial report, into four major phases.

The Market Buy Orders (Jul. 31 - Aug. 7, 2020)

The first phase of the so-called "Zeus Liquidation Pamp" involved scheduled coordinated market buy orders for precise moments in time (for instance - August 2, 2020, at 12 PM CST). A countdown timer was circulating social media channels a few days prior to the "event":

Source: Twitter

Telegram and Twitter were full of excitement coming from LINK’s blind supporters, awaiting their "victory" against Zeus Capital. People were desperately begged by probably renowned LINK Marines to "buy at least 10 link" and to become part of this noble cause:

Despite the community's upbeat enthusiasm, the strategy fell short of effectiveness as the results were short-lived price spikes. Clearly, the followers needed a well-defined target.

The Target Was Set and Risen Upon Achievement (Aug. 7 - Aug. 15)

At some point, a price target was set among the LINK cohort. Divine forces predicted that USD 11.28 was the magical number that had to destroy Zeus Capital’s short position.

Unsurprisingly, though, as the initial target was successfully reached, the community continued setting higher and higher goals to properly inflate the bubble we currently are in:

Am I missing out? (post-ATH)

LINK’s price skyrocketed, reaching ATH of USD 19.37 on Aug. 15, 2020. Scared of missing out, numerous retail investors took part in the pump scheme. As you can imagine, many of them used personal savings or took loans, blindly trusting everything said on Twitter and Telegram with regards to the token’s performance and glorious future. Chainlink cheerleaders even continued luring people into not giving up or else they "will be 40 and living in your [their] moms’ basement."

The Gloomy Aftermath (post-ATH)

Everything looked like a bed of roses to LINK’s supporters until the price started to fall down. Then appeared some worried, to say the least, investors who lost their savings, mortgages… and even families:

Was this whole exercise ethical? SmartContract/Chainlink took advantage of its loyal supporters to protect the immense wealth created and stored in LINK tokens.

As arrogant as it could get, the pace of LINK tokens sent from SmartContract’s development wallet to Binance intensified during the period:

There are lies, damn lies and Chainlink. Don’t get fooled for your hard-earned cash.

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