River has announced that the recent volatility that rocked its tokens was an organized and “coordinated market manipulation targeted at $RIVER through large short positions and concentrated Pts conversions.”
As of the time of writing, the River Pts token price was down by over 75% over 24 hours, while RIVER was down by over 13%.
River suspends conversions to prevent collapse
According to River, the trouble began on November 7 when it first detected suspicious activity across several exchanges. According to the company, large short positions were opened at the same interval, while massive amounts of River Pts were converted to RIVER and immediately sold.
River reported that the first thing it did after noticing the alleged suspicious activity was to buy back RIVER tokens from the market to stabilize the falling price and sentiment. However, it wasn’t enough to prevent it from happening again, as the same trading pattern was observed again two days after the first incident. This prompted the River team to suspend all River Pts conversion in what it claimed was a Soro-style attack.
In its post-mortem, the team said leaving the mechanism open would have allowed attackers to “amplify the pressure loop,” using short positions and conversions to drain liquidity further.
“It was, quite literally, a trolley-problem moment,” River wrote. “Do we stand by and watch the entire ecosystem collapse, or do we pull the brake to protect the long-term interests of the majority? We chose the latter.”
Upon suspension of the Pts conversion, River said the suspected attackers closed their short positions, confirming the intervention had “successfully prevented a deeper crash.” The company has since resumed limited buybacks and is redesigning its conversion mechanism to improve risk controls.
A weakness in conversion design
The River team also admitted that the event has also exposed structural flaws in their conversion design; however, they mentioned that they are redesigning the conversion mechanism and also putting in place improved risk controls to prevent future coordinated exploitation.
In its bid to be transparent to its users and community, the protocol also stated that it will be publishing detailed on-chain and exchange data to explain what happened. It added that it will be hosting a community AMA to address holder concerns.
In a bid to quell speculations of its involvement in the manipulation, the company stated that it does not engage in short-term trading or speculative partnerships. “We have turned down multiple offers for ‘volatility-driven’ partnerships because we believe $RIVER should grow organically and sustainably,” the statement said.
Users on X have commended the Rivers team for being proactive in their communication and their response in closing the conversion mechanism, thereby pausing a series of possible actions that could have led to a total market failure.
While some are waiting for the AMA, others have called on the team to provide clear timelines of how long the Pts conversion suspension will last and also set milestone checks for the proposed changes they stated they will be implementing, as it would go a long way in reducing anxiety and uncertainty among users.
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