Wintermute Exits as Sonic Reveals It Ended Its Five-Year Partnership

Wintermute was involved in a controversial token dump last month, but today's events may be part of a normal business interaction.

Sonic has publicly revealed that it ended its five-year partnership with Wintermute.

A few hours prior, the market maker dumped over $850,000 in S tokens, causing a 6% price drop.

This continues a pattern of market makers tanking tokens to return borrowed funds. However, today’s events may be part of a normal business interaction, with Sonic claiming no foul play.

Specifically, the company is planning to switch market makers after five years of working with Wintermute. The company's Head of Strategy said that they informed Wintermute of their decision 24 hours ago.

"We will not be renewing our MM contract with @wintermute_t. We have been using WM exclusively for 5 years of service. We have engaged with other MM firms who are willing to provide MM++, they get involved in our DeFi ecosystem, engage with applications..."

The post read.

"We are switching market makers. We informed Wintermute 24 hours ago that we will not be renewing our contract with them. We have been using them exclusively for the past 5 years and enjoyed a close partnership. Nonetheless, we've decided to move on and are currently in talks with several other market makers who can provide broader support for the Sonic ecosystem. CEX only support is simply no longer enough.

This successor firm will need to integrate more proactively with our DeFi ecosystem, community, apps, and developer team. We are excited to see what the future holds!"

Several users on X claimed that the market maker sold around 3 million S tokens in 24 hours, and several other whales disposed of even more.

Intel Scout, a Sonic ecosystem decoder, was the first to connect S’s price action with Wintermute’s token dumping. He claimed that the market maker sold around 3 million S tokens in 24 hours, and several other whales disposed of even more.

However, Sonic’s anonymous Head of Strategy responded to these claims, revealing that the companies had split ways.

This isn’t the first time that Wintermute faced accusations of market manipulation. In January, the firm faced backlash over $20 million in transactions with Binance.

Last month, Wintermute’s token dump tanked ACT by 50%, only a few months after it partnered with the project. This also led to community outrage.

Nonetheless, today’s actions have not caused a similar scandal yet. If Sonic was dissatisfied with Wintermute’s actions, the company could’ve addressed this, but it didn’t.

It even gave a sympathetic reason for the token sales, explaining that Wintermute needed to return loaned funds. Wintermute, for its part, hasn’t said anything about the episode.