The cryptocurrency Grok, whose name appears to be inspired by Elon Musk’s AI venture, saw its value plummet by a staggering 70% following accusations from blockchain investigator ZachXBT.

What Happened: The crypto sleuth revealed on Nov. 13 via a post on X (previously known as Twitter) that Grok’s online presence seemed to be a facade, repurposing assets from defunct projects, including a failed memecoin named ANDY.

This revelation sent Grok’s value tumbling from $0.027 down to a mere $0.007, a decline of 74.1%, within a perilous five-hour period. Although, a slight recovery ensued, bringing the price to $0.011 according to DexTools data.

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Why It Matters: ZachXBT revealed evidence of Grok’s team making a last-ditch effort to salvage the token’s reputation by transferring approximately $1.7 million worth of Grok to a burn address, an attempt to curtail supply drastically. This move, divesting 90 million Grok tokens, was confirmed by transaction data from Etherscan.

In a desperate bid to regain trust, the Grok team announced via their X account on Nov. 14 that all tokens allocated to the deployer had been incinerated, totaling around 180 million Grok tokens. At the token’s current valuation, this burn represented roughly $2 million.

At its zenith on Nov. 13, Grok boasted a market capitalization close to $200 million, positioning it amongst the top new memecoins for this investment cycle.

Musk’s Grok is an artificial intelligence chatbot inspired by the popular science-fiction series, The Hitchhiker’s Guide to the Galaxy, and boasts a rebellious nature. Musk, who recently expressed concerns about the potential dangers of AI, announced that Grok would be available to premium subscribers on his X platform after undergoing thorough testing. Notably, Grok possesses access to user posts on X and has a knack for delivering sarcastic responses.

It’s important to exercise caution as the low trading volume signifies a potential risk for traders involved in GROKAI. 

It should be noted that Musk has unequivocally stated that none of his companies, including xAI, will ever create cryptocurrency tokens.

Price Action: At the time of writing, Bitcoin (CRYPTO: BTC) was trading at $37,112 down 0.19% in the last 24 hours, according to Benzinga Pro.

Photo by Igor Faun on Shutterstock

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