Speculation about a Trump-themed memecoin led to losses

Introduction

The meme coin frenzy is still on. Especially as the US prepares to elect a new president, there are many unconfirmed rumors about meme coins to be released by Trump. A recent speculation has led scammers to cash in on unsuspecting traders with the launch of a fake memecoin supposedly linked to Trump.

Now, many crypto traders are counting their losses which has exceeded $150 million. They invested in a fake coin which was supposed to be from Trump. When they scammers pumped the coin to a very high price, they pulled out suddenly, sending the price of the coin to ashes. Here is how it happened and why everyone should beware of fake celebrity meme coins.

A tweet - then a fake coin launched

It all started when the eldest Trump sons - Eric Trump - made a Tweet about liking defi. He is a popular figure and people read lots of meanings into Tweets from someone like that. Scammers also were on standby to cash out. Check out the Tweet below which Eric made expressing his interest of approval of Defi on August 6th:

I have truly fallen in love with Crypto / DeFi. Stay tuned for a big announcement source

Note that he mentioned that his followers should keep an eye on the launch of a new project. That tweet made many crypto traders speculate that possibly, a new memcoin would soon be launched in the name of Trump. Scammers were watching and quickly sprung into action to take advantage of the frenzy and tweet. They rolled out a new meme coin called Restore the Republic (RTR).

RTR was launched shortly after Eric's Tweet and there were many speculations that this coin was released by Eric as a follow-up to his earlier Tweet. Unfortunately, has has nothing to do with it. Immediately after the launch of RTR and the subsequent noise around it, many traders started purchasing the token. Millions of dollars worth of Sol was pumped into the coin which sent its price to skyrocket more than 100% of the launch value within a 24 hour trading period. Then comes the shocker!

From a peak price of $0.024, RTR came crashing down to its current price of $0.0052 as you can see from the Coingecko chart below. It happened so fast that crypto traders had no time to react to the sudden drop. As a result, more than $150m was lost to the liquidation.

from Coingecko

This is what typically happens in all this rush to make money from newly launched celebrity meme coins. Although RTR was not names after Trump, it followed a tweet from Eric Trump. The name was also designed to look like its coming from the Republican party. Unfortunately in rug pull projects like this, there are victims. In this case like in a few others before it, the loss is huge and irreparable.

Eric who made the Tweet earlier probably noticed what was going on and had to later come out and clear the air. unfortunately though, the scam has happened and victims have see their hard-earned money drain away. Below is a tweet from Eric to probably distance himself from the rug pull:

Friends: Beware of fake tokens! The only official Trump project has NOT been announced! You will hear it here first. source

Unfortunately this warning is late although it came just two days after the first tweet. Millions of dollar worth of Sol have been stolen by the scammers and no amount of warnings will reverse the damage caused. Just to show how bad that was, a follower immediately responded that he lost 1000 Sol in the rug pull:

I just lost 1000 Sol source

Dont repeat same old mistakes

Scammers are not particularly doing anything new in the space. The keep on repeating old tricks and people fall for them. Its quite unfortunate. But then, a little carefulness and heeding same old advice often sounded out in the crypto space is all that one needs. Such advice includes the following two:

• Invest what you can afford to loose: In no other place is this advice more applicable than when investing in celebrity meme coins just recently launched. We all know that those coins apart from just a few are bound to collapse sooner or later. They are not there for the long run. So why put all your eggs in the same basket?

Well just consider any investment in new mem coins as loss. If that is the case, then whatever you are investing in these projects should be money that wont hurt if they go down the drain. So no point investing a significant amount or one's life savings into a new meme coin just because there is the name of a popular figure attached to it. That is quite unreasonable.

• DYOR: If you check these new meme coins and other new projects well, there are always visible red flags. Discovering a fake meme launch is not exactly rocket science. For example, investigations showed that the RTR in circulation was stored in one wallet. That really signals that this is a project that will rug soonest and it happened. So check well.

Look at the team behind the project. Check their official handles and website. Consider how long they have operated and many other things. A little search with tools like Solsniffer will give you insight into what you are dealing with.

Conclusion

So sorry for the victims of another meme coin. Maybe the lessons are clear now although it might seem hash to the victims. The crypto space is full of scams, lets just be careful and smart with investments.

Note: Thumbnail is mine

Posted Using InLeo Alpha