Celestia co-founder Mustafa Al-Bassam has responded to intensifying community criticism over the project’s steep token decline and alleged insider misconduct, stating that the core team remains intact and committed - and that the modular blockchain startup still holds a $100 million+ war chest with over six years of operational runway.
Key Takeaways:
- Celestia faces backlash after token collapses over 90% from ATH and community accuses insiders of profit-taking.
- Mustafa Al-Bassam dismisses the accusations as "ridiculous FUD," insists founders and engineers remain committed.
- Celestia still holds a $100M+ treasury and a 6+ year runway, according to Al-Bassam.
- Critics cite early token unlocks, market misalignment, and failure to establish PMF among rollups.
- While Celestia claims 50% DA market share, long-term traction and builder trust remain uncertain.
In a June 24 post on X, Al-Bassam dismissed accusations of insider profit-taking and abandonment as “ridiculous FUD,” asserting that Celestia’s early employees, founders, and engineers are still “working as hard as we did when Celestia started 5 years ago.”
His comments come in the wake of mounting online backlash and investigative threads from prominent crypto researchers and investors who have accused Celestia insiders of coordinated token dumping while retail investors endured the collapse of the project’s native token, TIA, which is currently down over 92% from its June 2024 all-time high of $20.91.
Allegations of Insider Sales and Token Misconduct
Much of the recent outrage was triggered by a viral X thread from pseudonymous account Startup Anthropologist, which alleged that Celestia leadership, including Al-Bassam, sold tens of millions of dollars’ worth of TIA in over-the-counter deals shortly after their token unlocks in October 2024.
The post, which garnered over 200,000 views, claimed: “All c-suite had unlocks in early Oct. 24... Mustafa sold 25M+ in OTC, moved to Dubai.”
The thread further accused Celestia of leveraging influencer partnerships to manufacture hype, while insiders strategically exited their positions under the radar. The timing of these actions - shortly before the token began its massive decline - has intensified community anger, especially as many retail holders now face losses exceeding 90%.
Another account, Shrutebuck, echoed the sentiment, writing: “They rewarded their early investors and themselves at the expense of retail, then they cry on the timeline about the ‘ridiculous FUD’ when the token is down 98%.”
Critics also raised concerns over the aggressive unlock schedule, which released large volumes of TIA into the market over just three to four years - far faster than typical long-term vesting schedules used in high-trust ecosystems like Ethereum.
“Why do you have a token unlock that lasts 3/4 years?” asked one user. “I believe in $ETH and little else... but I don’t believe in those who unlock all my supply in 3 years.”
Celestia’s Market Strategy Under Fire
Beyond the insider controversy, Celestia’s broader market positioning is also under scrutiny. In May, well-known investor Larry Sukernik described Celestia as a cautionary tale of attempting to “brute-force” market adoption through aggressive narratives and overhyped decentralization promises.
Sukernik argued that Celestia’s modular blockchain design - which separates consensus and data availability - only works if a thriving app ecosystem emerges to take advantage of it. But Celestia may have launched too early, he said, before sufficient product-market fit existed among rollups and alt-layer-1s that would rely on DA services.
“The problem was there aren’t enough apps with PMF that are motivated to vertically integrate,” Sukernik wrote, noting a mismatch between Celestia’s modular architecture and the real-world needs of builders.
At the time, Al-Bassam defended the project’s go-to-market timing, noting that Celestia launched before rollups became the dominant scalability model, and said the team had to “go out on a limb” in anticipation of trends still forming.
In response to the criticisms, Al-Bassam emphasized Celestia’s current network traction, highlighting:
- Over 30 rollups deployed using Celestia’s DA layer.
- An estimated 50% share of the alt-DA market - a segment composed of projects opting for external data availability providers rather than mainnet Ethereum.
“We’re basically the default solution for alt-DA these days,” Al-Bassam said, pointing to projects like Dymension, Manta, and others using Celestia’s DA infrastructure.
Yet even those metrics were met with skepticism. Critics have pointed out that data availability market share doesn’t automatically translate to economic sustainability, especially if many of the integrated rollups remain experimental, inactive, or low-traffic.
Token Performance and Community Fallout
At the time of writing, Celestia’s TIA token is trading at $1.61, up roughly 14% over the past 24 hours, possibly in response to Al-Bassam’s public defense and a minor bounce across altcoins. However, the token is still down over 92% from its peak a year ago.
Much of the community now views Celestia’s TIA as a cautionary example of rapid overvaluation, poor treasury management, and short-term insider alignment. Once heralded as a core component of the modular blockchain thesis, the project has faced a wave of disillusionment from both retail investors and builders.
Celestia launched with massive expectations. Backed by leading investors including Polychain Capital, Bain Capital Crypto, and Placeholder, the protocol raised over $55 million in total across several funding rounds between 2022 and 2023. Its October 2023 airdrop became one of the most anticipated events in crypto that year. But critics argue that its tokenomics and early-market strategy emphasized price growth and hype over long-term user alignment - a mistake that has proven costly for late-stage buyers.
Al-Bassam’s recent post reiterated that despite the crash, Celestia is far from out of money. He claimed the project retains a war chest exceeding $100 million, giving the team more than six years of operational runway at current burn rates.
While specific treasury wallet details weren’t shared, blockchain analysts tracking Celestia-linked addresses on Cosmos chains suggest the project still holds significant reserves - including unspent tokens, liquid stablecoins, and grants earmarked for ecosystem development.
However, Al-Bassam’s assurance did little to quiet ongoing debate around trust, governance, and transparency. Many in the crypto community argue that operational runway means little if community support continues to erode.