Serial Scammer And Rug Puller Steals Over $315,000 From Fake Meme Coins

A serial scammer and rug-puller have amassed over 160 ETH, worth $315,000 at spot rates, by creating fraudulent meme coins and rugging users off their hard-earned funds, on-chain data analyzed by LookonChain on July 9 shows.

Records show that the scammer’s scheme involves creating meme tokens and adding liquidity on Uniswap–a popular decentralized exchange–to entice unsuspecting liquidity providers and buyers, only to withdraw all the liquidity from the pool several days later, forcing prices to plunge. His actions have resulted in the loss of over 160 ETH over the last few weeks.

Fraudulent Meme Coins And Rug Pulls

The scammer’s activities came to light when it was discovered that they withdrew 1.5 ETH from KuCoin. This cryptocurrency exchange before July 15 doesn’t require users to verify their identity before launching a meme token, TOMMY, and supplying 1 ETH as liquidity. After 18 days, the scammer withdrew all liquidity, essentially rugging users. The scammer, data shows, made away with 28.7 ETH. 

With this “success” streak, the scammer was emboldened and created three new meme coins in KSI, ZUCK, and BILL. The liquidity of these tokens on Uniswap was also rugged, and the scammer stole 140 ETH at the expense of liquidity providers.

The scammer’s latest endeavor involves the creation of two new meme tokens, WALTER2.0 and GIGA2.0, accompanied by providing 2 ETH as liquidity. As of now, the liquidity for these tokens has yet to be removed. However, going by recent trends and the path of rug pulls, caution is strongly advised, and potential investors are urged to refrain from purchasing these tokens.

Exploiting Trust And FOMO?

The autonomous nature of decentralized finance (DeFi) coupled with the rising popularity of meme coins as more users jump in fear of missing out (FOMO), considering the recent success of tokens like SHIB, PEPE, and LADYS, there is a higher chance of users losing funds through rug pulls.

In this type of scam, a user creates a project, even heavily promoting it on social media platforms like Twitter, only to steal funds locked in the project’s liquidity pool, forcing the token’s price lower and preventing investors from selling. With this, investors are left holding worthless tokens, and their investment is lost.

Early this month, Encryption A.I. creator stole roughly $2 million ahead of the platform’s liquidity migration before apologizing. He revealed that he was battling crypto gambling addiction and had lost over $300,000 in the past few months.  

Research findings by Beosin, a blockchain security firm, revealed that $656 million of crypto assets were stolen in Q2 2023 through rug pulls, hacks, and other scams. The firm pointed out that there were more than 110 rug pulls through which liquidity providers lost over $75 million.