The altcoin market is teetering on the edge of losing investor trust, according to DeFiance Capital founder Arthur Cheong, who likened the current environment to a “lemon’s market” - a term from economics that describes markets plagued by low-quality products where good assets are crowded out by bad ones.
His warning comes as skepticism around the integrity of many newly launched tokens continues to grow, raising alarms over ethical standards, undisclosed partnerships, and systemic weaknesses in how altcoins are introduced and traded.
Cheong’s remarks follow a troubling pattern of token launches that have quickly unraveled post-listing. He pointed to widespread issues, including token generation events (TGEs) that are followed by rapid price collapses - many falling between 70% to 90% in value within weeks or even days. The result is mounting investor losses and a diminishing sense of legitimacy across the altcoin sector.
Lack of Transparency Threatens Market Integrity
In a recent post on X, Cheong took direct aim at what he described as growing collusion between project teams and market makers, who may be coordinating behind the scenes to manipulate token prices. He also criticized centralized exchanges (CEXs) for enabling these practices by failing to enforce transparency or ethical listing standards.
“The current altcoin market is fundamentally broken,” Cheong wrote, calling on leading industry players to establish baseline expectations for disclosures and trading conduct. Without reform, he warned, large swaths of the market could soon become “uninvestable” for institutional and retail investors alike.
His concerns echo broader sentiments in the crypto industry, where enthusiasm for the next altcoin rally is tempered by a steady stream of token failures, wash trading accusations, and questionable tokenomics.
MANTRA’s OM Token Plunge Reignites Debate
Cheong’s comments were underscored by a dramatic market event just days prior: the sudden collapse of MANTRA’s OM token. On April 14th, the token lost over 90% of its value in less than an hour, triggering speculation around insider activity and a lack of transparency in its tokenomics model.
According to exchange reports, OM had undergone significant tokenomics changes as far back as October 2024. Moreover, suspicious trading patterns were observed from associated wallets dating back to March—raising concerns that investors were misled or disadvantaged by asymmetric information.
The OM token crash is just the latest example in a growing list of altcoins that have either failed or been plagued by trust issues post-launch. A recent report from crypto wallet provider Tangem notes that from 2013 to 2025, more than 12,000 crypto assets have failed. Common causes include project abandonment, low liquidity, fraud, and unsustainable economic models.
The Road Ahead: Reform or Retreat?
Cheong’s call to action underscores a wider need for self-regulation and industry-driven standards, especially as the crypto space seeks to mature into a globally trusted asset class. Without stronger guardrails around token launches, listing standards, and market transparency, analysts warn the next altcoin season may do more harm than good.
With regulatory clarity still evolving and enforcement lagging, the responsibility to safeguard market integrity may increasingly fall on exchanges, venture investors, and protocol founders. The question now is whether the crypto industry can clean up its act before investor trust erodes beyond repair.