Cryptocurrency’s chronic insider trading problem extends from token launches to digital asset treasury (DAT) as investors leverage early knowledge on upcoming corporate coin purchases.
According to Shane Moridor, founder and CEO of blockchain advisory firm Forgd, the problem is deeper than just a few bad actors. He explained that insider-style behavior is a structural feature of the cryptocurrency market where prices often deviate from fair value.
Molidor, a veteran of trading desks in the West and Asia, told Cointelegraph that many early crypto institutions still treat regulation as an afterthought. “In the West, we don’t ask for forgiveness; we ask for permission,” he says. “In the East, it is common to act quickly, make as much money as possible, and deal with the consequences later.”
Molidor previously held leadership roles at crypto exchange AscendEX and Winklevoss twins Gemini. Before launching Forgd, he led trading at Chinese market maker FBG Capital. The company, which calls itself Web3 Investment Bank, advises on tokenomics design, market maker relationships, and exchange listings.
As DATs gain traction, Moridor warned that the same market dynamics that drive insider activity in token trading are emerging in institutional products.
“If an asset is illiquid, even a small amount of buyer demand can have a large impact on the market,” he said. “It’s a virtuous cycle — until it isn’t.”
The mechanics behind the engineered launch of cryptocurrencies
Molidor explained that in cryptocurrencies, the listing of new tokens prioritizes spectacle over fair market discovery, and that stakeholders in the listing process (exchanges, market makers, token issuers) are “self-serving and profit-seeking.” This dynamic will shape how new assets are introduced to retail traders, he said.
Exchanges may price the tokens low and keep liquidity low at launch, so even small purchases from retail users will drive up the price. “They are incentivized to adjust prices upwards,” Molidor said. “They can accomplish this through lesser-known tactics, such as intentionally underpricing token launches on TGE or diluting liquidity.”
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Retail traders interpret early green candlesticks as a sign of strength and rush to buy without realizing that their orders are the cause of the spike. “Everyone thinks they’re getting a fair and reasonable cost basis, but that’s not really the case,” he said. “They’re buying at an all-time high and causing a very bad user experience afterwards.”
According to Moridor, this cycle is most beneficial for exchanges. Each listing generates new volume, headlines, and user activity, even if prices collapse shortly thereafter.
“It’s just a marketing strategy,” he said. “They like to say, ‘The new asset we gave early access to is now trading at a 10x or 20x premium,’ but there was no fair and efficient price discovery in the open.”
Throughout Moridor’s career, he observed clear regional disparities in the listing process. Western exchanges like Coinbase are taking a slower, more traditional route, using auction-based listings that delay transactions while aiming for fair pricing. In contrast, Asian exchanges favor faster launches designed to capture speculative momentum.
“Coinbase’s approach is more efficient,” Molidor said. “But that doesn’t resonate with the speculative retail demographic.”
Cryptocurrency market tricks are appearing in cryptocurrency government bonds
Similar behavior is now occurring with DATs, or companies that buy cryptocurrencies to add to their balance sheets. Molidor said this trend has expanded from early insider-style token trading through institutional products.
He explained that DAT started by accumulating large coins like Bitcoin (BTC), which have high liquidity and efficient price discovery. However, as competition increases, many of these instruments are targeting smaller, less liquid tokens in search of higher upside potential.
This change makes DAT even more vulnerable to tampering.
The process behind Treasury funding also opens the door to front-running. During outreach to potential backers, insiders will have access to early information about which tokens will be purchased. This creates an opportunity to simply purchase assets up front on the secondary market in anticipation of future price increases.
“Front-running is now more evident as we are dealing with lower valuations and less liquid assets,” he added.
“What we found with DAT is that the implicit goal is often to create enough market impact on the underlying spot asset to cause a significant price increase, which in turn fuels speculative buyers’ fear of missing out, pushing prices even higher.”
But this feedback loop cuts both ways. Once buying pressure subsides, the illiquidity that pushed prices up could cause prices to crash. With few disclosure requirements and little connection to fundamentals, price becomes the only measure of value, and that price can be easily distorted.
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“When price becomes the only indicator of fair value and prices can be significantly influenced and manipulated by buying and selling even small amounts, runaway capitulation can occur,” Molidor added.
Early examples of corporate crypto purchases moving the market were seen in 2020 and 2021, when Tesla and MicroStrategy first added Bitcoin to their balance sheets. At the time, the market was thin and sentiment-driven, so even a modest announcement could trigger a sharp rally.
Today, such news has little impact as Bitcoin trades with deeper liquidity and broader institutional participation. Molidor said the “virtuous cycle” is now more pronounced in smaller, illiquid assets, which still react sharply to purchases of government bonds and funds.
Insider dynamics still define crypto movements
The blurred lines between token markets and institutional products demonstrate how speculation and information asymmetry remain woven into the core of cryptocurrencies.
In Moridor’s view, the way forward lies in better collaboration between blockchain founders, exchanges, and the current flood of institutions. Although most token projects are still launched with “great technology and formidable market strategies,” many institutional investors do not understand how crypto capital markets work, he said.
“The problem is that both sides misunderstand each other,” he said. “Founders don’t know how to operate within the financial system, and financial institutions don’t understand how crypto markets actually work.”
While the influx of institutional capital may legitimize cryptocurrencies from a traditional financial perspective, it also introduces new risks from a structure that still lacks transparency.
The next stage of the market will test whether participants can evolve beyond that model.
“You’re exposing something that a lot of investors don’t really understand,” Molidor said. “Once prices converge back to fair value, that misconception becomes very real.”
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