Categories: Blockchain Investments
Topics: Cryptocurrency

Controversy Surrounding Coinbase’s Base Network and the BALD Token

Coinbase's Base network – an Ethereum layer 2 – was introduced on July 13, primarily targeted at builders. 

The development team cautioned regular users against utilizing the network as it lacked a functioning user interface (UI) for its bridge at the time. This meant that users wouldn’t be able to withdraw their assets from the network.

Despite these warnings, some investors (degens) sought early returns by purchasing assets on the network before its official launch. They achieved this by using development tools to bridge Ether (ETH) from Ethereum to Base without a UI.

On July 29, a developer with the Twitter handle "Bald," who remains anonymous, announced the launch of the BALD token on Base at address: 0x27D2DECb4bFC9C76F0309b8E88dec3a601Fe25a8.

The token experienced an incredible 289,000% gain within the first 14 hours of trading. 

But on July 31, Twitter users reported that the token's deployer account had removed 1,034 ETH in liquidity, causing its price to almost plummet to zero.

Crypto Twitter has been buzzing with discussions following a new conspiracy theory that suggests FTX founder Sam Bankman-Fried might be secretly involved with this controversial new memecoin.

Some crypto nerds discovered that the Ethereum wallet address responsible for deploying the BALD token had received substantial funding from wallets associated with FTX and Alameda Research, fueling the conspiracy theory.

One anonymous DeFi commentator, Downsin, proposed that this connection meant SBF was "legit trying to make it all back from prison," even though SBF is under house arrest at his parent's home in California, awaiting an October trial.

Adding more momentum to the rumor, Blockworks data editor Andrew Thurman found that the same wallet address had made approximately 400 transfers to blacklisted USDT addresses and had strong connections with Alameda.

A pseudonymous trader, Hsaka, speculated that the timing of the BALD launch and its subsequent crash were orchestrated to provide SEC Chair Gary Gensler with ammunition to prosecute Coinbase, a former FTX competitor.

Yet another anonymous commentator, named "Hype”, pointed out several eerie similarities between the developer and SBF, particularly in their social media post sentence structure. Hype also noted that the wallet in question had a long history and was one of the first voters on proposals in the DeFi platform Sushi Swap.

Of course, SBF shouldn’t be able to do any of this as he faces strict internet usage restrictions as part of his bail conditions. 

Crypto influencer Tiffany Fong, who has communicated with SBF after his arrest, refuted the conspiracy theory, explaining that SBF has been using a "flip phone without internet connection" since his bail conditions were revised in April.

Furthermore, all visitors to SBF are thoroughly searched by security and are prohibited from bringing in external electronic devices, according to Fong.

Many people in the crypto world wear tinfoil hats, and while I don’t rule out SBF’s involvement in the BALD debacle, I think it’s wise to exercise a healthy amount of skepticism.

You can bet on whether you believe he did it or not here.

Despite all of this, I’m bullish on Coinbase (NASDAQ: COIN) and their new BASE network. 

And although they have no plans to launch a token directly, in Crypto Cycle I show you how to invest in the project regardless.

Chris Curl
Editor, Daily Profit Cycle