Arc tokens tumble after trader backlash over builder's nationality on livestream

A developer who appeared during Circle's Arc blockchain mainnet launch broadcast was Indian, prompting some traders to sell tokens on the network. The individual is not employed by Circle.

Panchu Vijay Pal operates XyloNet, a third-party stablecoin exchange that was highlighted as a partner by Circle's Arc team in June. Traders offloaded tokens unrelated to him on a blockchain whose validators include BlackRock, Visa and Mastercard.

Why One Guest Appearance Moved a Whole Chain

Circle introduced Arc's public mainnet on Wednesday with a livestreamed event from New York. The main program featured CEO Jeremy Allaire delivering keynotes and panel discussions involving BlackRock, DTCC and Aave. A separate Developer Pre-Show was scheduled earlier, promoted as partner showcases and community features.

Pal appeared in that pre-show from an at-home setup with a gaming chair visible behind him. A screenshot spread quickly on X, where trader KR told 764,000 followers he had exited positions.

I just sold everything I had on @arc

After seeing this live

Goodnight pic.twitter.com/yxOxrEKhut

— KR (@KR4ATH) September 16, 2026

The assets that declined were launchpad and meme tokens, not anything issued by Circle. No ARC token is yet trading. Data from GeckoTerminal on Thursday indicated TOLLY was down about 68% and ARGUS roughly 50%.

Speculators had spent weeks preparing for a meme token surge on Arc. Launchpads accounted for 82% of the chain's $410.8 million first-day DEX volume, and the initial selling wave was triggered by a person's appearance rather than a fundamental issue.

Does Data Support the Stereotype?

Responses to the clip escalated from jokes to dehumanising insults aimed at Indian people. Crypto commentator "Crypto with Khan" pushed back, naming Indian-born chief executives at Google, Microsoft, IBM and Adobe. Alphractal founder Joao Wedson shared his rebuttal with a longer response.

“Bias and racism are still very visible on X, especially in the crypto market. When innovation comes from the U.S. or Europe, it is often treated with credibility by default. When it comes from Asia, the reaction is frequently much more skeptical,” Wedson posted on Thursday.

Khan later posted a ranking of the ten biggest crypto frauds by country of origin, which he said he compiled by asking an AI chatbot. FTX, PlusToken, OneCoin and Africrypt led the list.

If you still think 🇮🇳 Indians are scammers and ruggers then just go to Claude or ChatGPT and type "Top 10 scams in crypto"

All are non-Indians ✅

Then type "rug pull" or "Ponzi" then again you'll find non-Indians on top.

Then check the most bundled token launches data by… pic.twitter.com/MLvW2z2vLh

— Crypto with Khan (@Cryptowithkhan) September 17, 2026

Additionally, Chainalysis's 2026 Crypto Crime Report links over $2 billion in 2025 theft to North Korean state-backed hackers, including the $1.5 billion Bybit incident. It traces pig-butchering scams to compounds in Cambodia and Myanmar.

Circle's Arc team had promoted XyloNet as a model project in a June partner feature. On launch day, the chain's traders treated its founder as a reason to offload tokens. Both groups drew from the same company's audience.

XyloNet went live on Arc mainnet this week regardless of the reaction. The tokens that were sold in reaction to Pal's presence were never his to control.