Act I AI Prophecy (ACT), a token associated with the artificial intelligence-focused project of the same name, saw a sharp decline on Tuesday as its price fell 58% in just one hour. The sell-off came after Binance adjusted the leverage and margin levels of many tokens, including ACT, which led to strong liquidation pressure in the market.
ACT Falls as Binance Leverage Adjustment
According to data from CoinGecko, the price of ACT fell from $0.19 to $0.08, wiping $96 million off the token’s market capitalization. Analytics platform Lookonchain reported that a whale was liquidated worth $3.79 million when ACT dropped to $0.1877, causing a ripple effect across the market.
The ACT development team later responded, saying that Binance’s leverage adjustment was announced in a short period of time, causing many large traders to close positions or reduce their investment size, leading to a wave of sell-offs. Binance also confirmed that four users, including three VIP traders, sold more than $1 million worth of ACT on the spot market, accelerating the token’s price decline.
ACT Project Claims No Internal Error
In the official announcement, the ACT team emphasized that the event did not stem from any internal errors or fundamental issues in the project. They asserted that no party benefited disproportionately from the transaction and that the entire circulating supply of ACT is available on the open market, making it impossible for exchanges to interfere with user behavior.
Despite the sharp decline in the token, the ACT project remains committed to its long-term vision of integrating artificial intelligence into the decentralized ecosystem. The team also confirmed that they will attend the Token2049 event later this month to present their future development plans.
ACT Drops 70% in One Week, CZ Emphasizes AI Applications
After the liquidation shock, the price of ACT continued to fall by 37.4% in one hour and lost 70.8% of its value within a week, currently trading at $0.05643. From its all-time high of $0.9198, ACT has fallen by nearly 94%, although it is still 340% higher than its all-time low.
Binance co-founder Changpeng "CZ" Zhao also expressed his views on the combination of AI and crypto, criticizing the trend of AI projects focusing too much on issuing tokens instead of creating practical applications. CZ believes that AI development teams should build a strong product before issuing tokens, suggesting that AI could use existing cryptocurrencies instead of creating its own.
The Future of ACT and Lessons from the Incident
The ACT incident illustrates the complexity of the relationship between exchange policies, market dynamics, and the long-term potential of crypto projects. While leverage adjustments can have a big impact on token prices in the short term, the true value of a project will depend on its use case and technical foundation.
Once the dust settles, the broader discussion about responsible tokenomics and the role of centralized exchanges for blockchain projects will continue to heat up in the crypto industry.
