Chain scammer and rug puller collected over 160 ETH, worth $315,000 USD at spot prices, by creating fraudulent meme coins and ripping users out of their hard-earned cash, on-chain data analyzed by LookonChain on July 9 Offers.
Records show that the scammer’s scheme involves creating meme tokens and adding liquidity on Uniswap – a popular decentralized exchange – to lure unsuspecting buyers and liquidity providers, only to withdraw all liquidity from the pool several days later, driving prices down. His actions led to the loss of over 160 ETH over the past few weeks.
Fraudulent meme coins and pull the rug
The scammer’s activities were exposed when it was discovered that they had withdrawn 1.5 ETH from KuCoin. Before July 15, this cryptocurrency exchange does not require users to verify their identity before launching the meme token, TOMMY, and providing 1 ETH as liquidity. After 18 days, the scammer withdrew all the liquidity, basically pissing off the users. The data shows that the scammer disposed of 28.7 ETH.
With this “success” line, the scammer took heart and created three new meme coins in KSI, ZUCK, and BILL. The liquidity of these tokens on Uniswap was also difficult, and the fraudster stole 140 ETH at the expense of the liquidity providers.
The scammer’s latest endeavor involves the creation of two new meme tokens, WALTER2.0 and GIGA2.0, accompanied by the provision of 2 ETH as liquidity. As of now, the liquidity for these tokens has not been removed. However, as per recent trends and rug-dragging path, caution is highly advised, urging potential investors to refrain from buying these tokens.
Do you exploit confidence and dread?
The independent nature of DeFi along with the increasing 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 users lose money by rug withdrawals .
In this type of scam, a user creates a project, even promoting it heavily on social media platforms such as Twitter, only to steal funds locked into the project’s liquidity pool, driving the price of the token down and preventing investors from selling. With this, investors are left holding worthless tokens, and their investment is wasted.
Earlier this month, the creator of Encryption AI stole nearly $2 million in cash from the platform before apologizing. He revealed that he has been battling a crypto gambling addiction and has lost more than $300,000 in the past few months.
The results of research conducted by Beosin, a blockchain security company, open that $656 million in crypto assets were stolen in the second quarter of 2023 through rug checkouts, hacks, and other scams. The company noted that there were more than 110 carpet withdrawals during which liquidity providers lost more than $75 million.
Featured image from Canva, chart from TradingView
