What is happening with the scandal surrounding AVAX?
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Important takeaways
- Avalanche crypto (AVAX) has grabbed the headlines. But in the flood of information it can be difficult to find exactly what is going on, we lay it out.
- AVAX faces allegations of foul play against competitors from a Crypto Leaks report.
- Part of KKR’s
KKR The Health Care Strategic Growth Fund II was recently tokenized on the Avalanche platform.
What is AVAX?
First, let’s review a little bit of the history of AVAX.
Avalanche is a cryptocurrency and blockchain platform set up to compete with Ethereum. Within the Avalanche blockchain, AVAX is used as a token to support a variety of blockchain projects, such as tracking smart contracts.
After launching in 2020, the Avalanche platform has positioned itself to become a fast, affordable and secure way to process transactions. Although the platform can continue to create AVAX coins up to the 720 million token cap, the rate at which tokens are minted is affected by the votes of current AVAX holders.
AVAX is used to secure all transactions that take place on the Avalanche network, but you can buy tokens on any major cryptocurrency marketplace.
AVAX: Trends over time
Cryptocurrency investors are no strangers to market volatility. In fact, you could argue that cryptocurrency is one of the more volatile asset classes out there. After reaching an all-time high of $146.22 in late 2021, the value of AVAX has fallen. As of mid-September 2022, AVAX is trading at $19.49. That’s a loss of 87.6%.
AVAX: Latest news
The value of an AVAX token is tied to the utility of the Avalanche platform. If people want to use the Avalanche platform, AVAX tokens rise in value. On the flip side, if the platform becomes obsolete, or simply unpopular, the AVAX token likely won’t be as useful for an investment portfolio.
Here’s a look at the latest headlines and how this information could affect the value of AVAX.
Accusations from whistleblowers
In August 2022, a self-proclaimed whistleblower called Crypto Leaks released a report that included detailed allegations against Ava Labs, which is the company behind the Avalanche blockchain. In this report, Crypto Leaks accused Ava Labs of shady backdoor deals designed to weaponize its power in lawsuits against other platforms.
Specifically, the report outlined an arrangement that Ava Labs allegedly made with a law firm. Law firm Roche Freedmen was reportedly looking at Ava Lab rivals with the intention of gathering dirt. With the dirty laundry, the law firm was supposed to use the information to build class action lawsuits against these rival companies.
The Crypto Leaks report stated: “We can reveal that the pact directs Roche Freedman and their leader Kyle Roche to: 1) use the US legal system – gangster style – to attack and damage crypto organizations and projects that may compete with Ava Labs or Avalanche somehow, 2) sue crypto industry players in general for the purpose of creating magnets for regulators like the SEC and CFTC that distract them from the highly commercial nature of Ava Labs and the Avalanche blockchain, and 3) secretly pursue Emin Gün Sirer’s personal vendettas against individuals.”
If rival companies face lawsuits, it could significantly hamper their ability to compete with Ava Labs. According to the report, Ava Labs planned to reward the law firm with an extensive amount of AVAX tokens and Ava Labs shares.
After the report was published, the value of AVAX took a deep dive. Ava Labs’ CEO Emin Gün Sirer denies allegations of any improper deals between his company and the Roche Freedmen law firm.
Private equity tokenization
As the allegations continue to swirl, there’s an important piece of encouraging news about the Avalanche platform.
Securitize is a digital asset investment firm that launched a fund that tokenized a portfolio of KKR’s Health Care Strategic Growth Fund II. This tokenization happened on the Avalanche blockchain.
A major goal of this tokenization is to create a path for individual investors to participate in private market investments. If the trend continues, this type of tokenization could help investors dive headfirst into more private market investment opportunities without specialized connections or piles of cash.
Crypto investments
If you want to invest in crypto, it is possible to buy AVAX tokens through major cryptocurrency exchanges. But when it comes to investing in individual cryptocurrency assets, it’s a good idea to prepare for extensive monitoring.
The good news for new crypto investors is that there is another option. Instead of signing up for a large commitment in a single cryptocurrency, you can diversify your crypto holdings by investing in Q.ai’s Crypto Kit. When you invest in Crypto Kit, Q.ai takes care of the monitoring so you can painlessly build an investment portfolio that works to balance risk and execute trades.
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