Plasma Battles FUD: Co-Founder Rejects Claims of Team Dumping XPL Tokens

The launch of Plasma’s native token, XPL, has been anything but really smooth. After surging to $1.66 shortly after its debut on September 25, 2025, XPL saw its price collapse to around $0.90, wiping out nearly half its value in less than a week.

The sharp decline quickly triggered speculation across the crypto community about insider selling, team misconduct, and market manipulation. On October 1, co-founder Paul Punt moved to address these rumors directly, aiming to reassure the project’s growing base of users and investors.

Insider selling and market maker speculation

In a post on X under his handle @pauliepunt, Punt denied any insider dumping. “No team members have sold any XPL. All investors and team XPL is locked for 3 years with a 1-year cliff,” he wrote. According to him, the only tokens currently in circulation are from the public sale and liquidity allocations.

Punt emphasized that this lockup structure was designed to align with industry standards and prevent early exits by insiders. His comments were amplified by outlets which highlighted that team and investor allocations remain inaccessible until at least September 2026.

Punt also addressed other circulating claims, including reports that market maker Wintermute was involved in managing XPL’s liquidity.

“We have not engaged Wintermute as a market maker and have never contracted with Wintermute for any of their services,” he stated, adding that the project only has access to the same public on-chain data as anyone else regarding Wintermute’s token holdings.

Team composition, trading patterns, and next steps

Another narrative questioned Plasma’s team makeup, citing alleged ties to other high-profile projects like Blast and Blur.

Punt clarified that only three of the team’s roughly 50 members previously worked on those platforms, while the majority come from companies such as Google, Facebook, Square, Temasek, Goldman Sachs, and Nuvei..

Despite the volatility, XPL launched with significant momentum. Backed by Tether, Bitfinex, and Peter Thiel, its July token sale raised $373 million, well above the $50 million goal, and the network secured $2 billion in total value locked within six days.

Still, on-chain analysts like CryptoR have pointed out that 85% of the top 20 profitable traders exited positions early, suggesting short-term profit-taking added to the downturn.

Punt concluded his remarks by reaffirming Plasma’s focus on long-term development, highlighting its zero-fee stablecoin transfers and more than 100 active DeFi integrations. At the time of writing, XPL trades at $0.988, down 5% over the past 24 hours, according to CoinGecko.

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