The Kujira Foundation's operating wallet was liquidated, causing the token to drop by 40%.

ChainCatcher news, according to The Block, the price of Kujira tokens dropped 40% today due to the liquidation of the Kujira Foundation's operational wallet, falling from $0.97 to $0.57.

The foundation had taken on leveraged liquidity provision positions worth millions of dollars but failed to manage them properly on its own DeFi platform.

The team claimed in a statement that the operational funds using leveraged positions were intended to enhance liquidity and stimulate activity on its DEX. The reason for the liquidation was that the team had insufficient collateral for loans obtained using its own Kujira (KUJI) token reserves in a turbulent environment.

This led to automatic liquidation, triggering a chain sell-off and causing the prices of the collateralized assets to drop. Data from Pulsar Finance shows that the team's wallet still has $2 million in debt.