Erik Voorhees, the prominent bitcoin entrepreneur behind the privacy-focused AI chatbot Venice, is facing serious allegations after onchain data revealed that insiders may have dumped $10.2 million worth of the platform's Venice token (VVV) immediately after its launch on January 27. The token initially surged to a high of $19.38 before crashing to $2.44 by February 2, representing a decline of nearly 63%.
Onchain Sleuth Reveals Insider Dumping
Amir Ormu, an onchain analyst at crypto marketing firm Castle Labs, posted on X that sixteen wallets funded by a Venice team multi-signature wallet—which controlled 23% of the total supply—began selling almost instantly after the token went live. According to Venice's public tokenomics, 35% of the total 100 million VVV supply was allocated to the company, with 10% going to the team. Of that team allocation, 25% was unlocked at launch, with the remainder vested over two years.
“The Venice team has sold over $10.2 million in $VVV tokens,” Ormu alleged. “They received tokens four days prior to the launch, and instantly dumped right after the launch.” He also accused the project of sending 5.5% of the supply to market makers Wintermute and Kbit without proper disclosure. Ormu claims Wintermute sold its portion even before the token was listed on any centralized exchange, calling it a “cash grab” rather than legitimate market making.
Voorhees Fires Back: Everything Was Transparent
Voorhees responded swiftly to the allegations, asserting that the token's terms were clearly stated in the official announcement blog. “Approximately 2.5% of supply could be sold… A fraction of that 2.5% was actually sold. This was all conveyed upfront,” he wrote on X. He insisted that the genesis addresses were obvious and that all transactions were onchain and transparent.
Regarding the market maker allocation, Voorhees noted that the 10% set aside for market makers was part of the disclosed tokenomics. However, Ormu countered that Wintermute's pre-CEX listing sales on DEXes constituted dumping, not market making, and left retail investors at a disadvantage.
Coinbase Caught in the Crossfire
Ormu also criticized Coinbase for listing VVV so quickly, implying that the exchange may have failed to vet the token properly amid a flood of listing requests—Coinbase CEO Brian Armstrong recently admitted the exchange receives 1 million token listing applications per week. Voorhees dismissed the criticism, arguing that Venice's tokenomics were fully transparent and that Coinbase's listing process was unrelated.
As of press time, VVV trades around $2.80, down more than 85% from its all-time high. The controversy reignites debates about insider trading and market maker conduct in token launches, underscoring the need for greater scrutiny in the crypto space.