Venice AI’s VVV token saw a sharp 50% drop following insider trading accusations, dampening initial excitement surrounding its debut.

Launched on Monday, Venice AI is a new platform built on the Base network that offers users access to China’s DeepSeek with enhanced privacy features. The token quickly surged in value, skyrocketing from a starting market cap of $20 million to $1 billion, attracting attention for providing private, uncensored AI inference without per-request fees.

The token’s meteoric rise was further boosted by its immediate listing on Coinbase (COIN), making it one of the rare tokens to be featured on the exchange on the same day as its launch. However, the enthusiasm was short-lived when reports surfaced that two contributors from Aerodrome Finance, a partner involved in the launch, had made significant purchases of VVV tokens before any public announcements. Their stake reportedly surged from $50,000 to $1 million in under an hour.

These revelations sparked a backlash, leading Aerodrome to suspend the two contributors shortly after the incident was flagged. The company stated that the trading activity had been detected within 30 minutes through internal monitoring, prompting an immediate internal investigation.

“We’ve suspended the two contributors and will continue to investigate the situation thoroughly, taking appropriate actions as necessary,” Aerodrome Finance assured the community.