Paragon, an altcoin that is aiming to reform the cannabis industry, briefly broke into the top 20 cryptocurrencies by market cap yesterday. This isn’t good news, though: it seems that price manipulation was the cause of Paragon’s short-lived success, and the coin quickly slid back down to #131. In terms of price, Paragon experienced an exponential increase, driving the coin’s value from $0.17 to $10.28 in just a few hours — an extremely unlikely accomplishment, to say the least.
This isn’t the first time that the coin has looked sketchy: Paragon lost most of its value after the conclusion of its ICO in 2017, allegedly due to the coin’s creators spending proceeds on unrelated real estate investments. Later on, Paragon was targeted by the SEC as an unregistered security—but in November, the Paragon team paid a hefty fine and complied with the demands of the SEC, earning a place in the good books of regulators.
Despite Paragon’s attempts to repair its image, the coin remains controversial, and that controversy is being exacerbated by yesterday’s dubious price surge. Reddit’s /r/cryptocurrency subreddit has suspended discussion of the coin due to “the ridiculous amount of drama and in-fighting” between users and Paragon representatives. However, some posts have made it past the filter, indicating widespread distrust of Paragon within the crypto community.
The exact factors that led to Paragon’s brief price surge are still unclear, although it seems that a handful of minor exchanges are responsible for raising Paragon’s price and, by extension, its market cap. Even major coins like Bitcoin are susceptible to price manipulation, although the results are usually less dramatic.
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Exchange prices are undoubtedly the immediate cause of Paragon’s price surge, but that fact doesn’t explain why those exchanges changed the price of the coin. It’s not clear whether exchanges did so of their own volition, whether the Paragon team was involved, or whether external actors or trading bots are responsible. In any case, the price gain is extremely unrealistic and unsustainable, and it is not a very good look for Paragon.
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