Phantom faces backlash for allegedly misleading investors over Ace of AI partnership

Key Takeaways

• Phantom faced criticism after Ace of AI announced a supposed partnership, causing investment in ACE.
• Clarification by Phantom that it was not an official partnership led to ACE token's value drop.

Phantom, a prominent multi-chain crypto wallet provider, faced criticism after their social interaction with Ace of AI, which many interpreted as a formal partnership between the two projects, led to confusion and investor losses.

On Jan. 9, Ace of AI announced on X that they were “excited to partner with Phantom” as part of the Phantom embedded early access program. Phantom replied to Ace of AI’s tweet with a series of emojis that were interpreted as an official partnership.

The announcement led to a surge in the price of Ace of AI’s token, ACE. According to data from GeckoTerminal, the token rocketed to $0.017 following the news.

Phantom later deleted the comment and clarified in a separate statement that Ace of AI was merely using their embedded wallet product and that no partnership or endorsement existed. They said they were unaware their service would be used to endorse any token.

ACE’s value quickly plummeted after Phantom’s clarification. Currently, it is trading at approximately $0.0005, down over 90% from its initial rally.

Users on X started confronting Phantom and questioning their communication approach. Many investors reported that they felt misled by the perceived association between the two companies and suffered financial losses.