A new and alarmingly effective rug pull scam has emerged on the Solana (SOL) network. Crypto expert and social media personality known as “Short Form King” (@retentionjunkie) has recently shed light on this sophisticated scheme, which has been flying under the radar of most traders’ research processes.
Understanding the Scam
This new method of rug pulling has been particularly successful, with scammers reportedly making off with 500-1000 SOL per coin. The scam coins are often presented with well-crafted memes and appear to be set up by experienced teams, making them indistinguishable from legitimate projects at first glance.
A recent example cited by Short Form King is the $NOFEAR token, which managed to reach a market cap of $1.2 million before the team behind it crashed the price by dumping their supply.
NEW PUMP FUN RUG METHODThere is a new "method" ruggers are using that flies under the radar of most peoples research process Making this thread because I'm seeing these scammers take your $SOL over and over and over again.There is a new "method" ruggers are using that flies… pic.twitter.com/qFhVBdFMvG
— Short Form King (@retentionjunkie) July 15, 2024
How the Scam Works
The key to this scam’s success lies in its ability to appear legitimate on typical research tools like Bubblemaps. When examined superficially, these coins show no suspicious wallet connections or concentrated supply holdings, except for the expected Raydium liquidity pool.
Red Flags to Watch For
Lack of Community Engagement: The first red flag is the absence of genuine community interaction. On platforms like Pump Fun, there are very few comments or engagements in the “thread” section under the coin, indicating a lack of organic interest.
Suspicious Trading Activity: The “Trades” section on Pump Fun is a critical area to examine. Legitimate projects typically show a mix of buys and sells. However, these scam coins often display only one page of transactions, with unusually large buys towards the end of the bonding curve and notably zero sells.
New Accounts with No History: Perhaps the most telling sign is the lack of previous activity from the buying accounts. Most or all buyers will only have interacted with this specific coin and have no other Pump Fun activity, likes, or followers.
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How Scammers Evade Detection
To avoid detection on tools like Bubblemaps, scammers employ tactics such as using “washing” services like Solnado or funding their operations from multiple unlinked centralized exchanges (CEXs). This makes the buyers appear as separate, unrelated entities.
When it’s time to execute the rug pull, the scammers combine all their supplies into one wallet and rapidly sell off the tokens, crashing the price.
Short Form King advises thoroughly checking the red flags mentioned above before investing in any new Solana-based token.
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