Beware of rug pulls as investors lost $26m on fake memecoin presales

Introduction

More than $26m has been lost in Solana memecoin presales in the last 30 days. Details of the projects involved and the amounts raised from each presale was investigated and reported by crypto data aggregator zachxbt on X. Crypto users that participated in those presales would be left wondering how they got involved in this scam and became another statistics. Whether the founders of such project would continue to work on them or the value of investments recovers are all left to speculation.

In the last few weeks or months, there has been memecoin madness or frenzy as many of such tokens appreciated in value significantly enriching their holders. The crypto community thus shifted all its attention on emerging memecoins especially those launched on the Solana network. While some of them are geniune projects, a few are scams and many have had their investments washed away in market value of washed down or the team simply abandon ship. In either case, significant investor funds are lost.

So much lost in so little time - $26.7M

30 days is a very long time in the world of crypto. A lot could go wrong in that time. So have have crypto enthusiasts that invested in some new solana memecoins presales. Zachxbt who have been exposing fishy presales on X recently investigated and discovered 12 abandoned presales of Solana memecoins. Interesting data about these projects and their founders were included and you may want to take a look and trade cautiously.

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According to the data provided in the table above by Zachxbt, the biggest project raised 52,220 SOL from users that participated. The name of the token is LIKE and currently, it has lost more than 90% of its value after the presale. The rest of the projects also have similar fate. One of the projects above never listed token people have paid for. Notice the X (formerly Twitter) account of the founders and beware doing any business with them.

DYOR before participating in memecoin presales

With the frenzy around memecoins recently, many users have fallen victim to rug pull projects. The easiest of them all is presales. In recent times, majority of these fake presales have happened on the Solana blockchain. With the recent surge of Solana memecoins like Bonk, WIF and others, it is all too easy to understand why scammers choose that blockchain. And it is equally important to beware. A little digging here and there will reveal whether a project is real or a rug pull.

It would be nice to share some warning signs that a presale project is likely going to end up a rug pull.

• Unknown Team: Going anonymous is great in many aspect of crypto transactions. But when it comes to launching a presale, a faceless team is the very first warning sign to take serious. Most of these presale rug pulls are done by teams that try as hard as possible to hide their identity. It makes sense because they are into scam. So they do not want to make it easy for anyone to know who they really are.

A team conducting a presale tries to hide their identity in so many ways. For example, you will not see a detailed team section when you visit their website. Sometimes, they might try to put limited information about the team while clearly hiding details. The team profiles might contain emojis instead of real images. The real names might be hidden and replaced with usernames or pet names. These are all clear efforts to conceal the identity of the fake team and make it harder to fish them out when they exit the project.

• New X accounts with inflated following: On X is where all the noise about these new projects are made. First of all, if the project has a new X account, then that is a red flag. Most genuine presale projects have been working on the background for years. So a presale account with a fresh X page is certainly going to be a red flag.

Another thing to watch on the page is the following. If the account is relatively new, but with massive following, then its likely an artificial inflation of the numbers to deceive unsuspecting victims. Also, if the team has not given updates or is not constantly in touch with followers on their social media page, that is another red flag to watch out.

• Missing or poorly done Whitepaper: Most of fake presale projects usually do not have a technical paper detailing how the tokens are to be minted, held and distributed. A few that attempt to have often do not have all the details that users need in that document.

So before participating in any presale, be sure to check the Whitepaper and make sure that important pieces of information about the token is there. If the team is holding a large pool of the new tokens, they will likely dump them after presales.

Finally

Do not become the next victim. Always do your own research and do not invest your life savings. There are lots of rug pulls and with a little carefulness, you wont fall victim to such fake projects.

Note: Thumbnail is mine.

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