My experience with fraud using meme coin
First, I saw a lot of buzz on Twitter/X and Telegram. I did some research, and this coin seemed like the next big thing; every influencer was promoting it, and the follower count was high enough, but not so high that I wouldn’t have a good opportunity to invest early. There was no website, just social media.
The team was anonymous, but I ignored it, drawn in by the hype. However, the promises of quick profits blinded me. I invested in the presale, where I had to send some SOL to their wallet, expecting to receive their token in return. After raising over $300,000, they added some liquidity to a decentralized exchange.
The price went up, which reinforced my belief. Then, suddenly, the team withdrew all the funds, causing the price to collapse to zero.
In retrospect, there were clear warning signs: anonymous creators, aggressive marketing, and unrealistic promises. This painful experience taught me the importance of careful research and verification in the volatile world of cryptocurrencies.
How to avoid getting scammed
The term “extortion” is a notorious scam in the cryptocurrency world where developers create a token, overhype it, and then withdraw all the funds, leaving investors with worthless assets. This article aims to teach readers how to recognize and avoid these types of scams.
Understanding Profit Withdrawals:
- Launch and hype: Scammers launch a new token, often aggressively promoted online; large social media following, influencers promoting the token, very poor or no website at all.
- Initial investment: They may invest their own money to create a false sense of security and credibility. They may even have a token economy and roadmap.
- Price manipulation: Through marketing and initial limited supply, the price is artificially inflated. You have the opportunity to invest in the presale, and also through any decentralized exchange where they add liquidity.
- Withdrawal: Once investments reach a sufficient level, the scammers withdraw everything, causing the price to collapse.
Mineable Tokens: Some creators leave the option to mint more tokens, which dilutes the value of existing tokens and causes your investment to decrease in value over time.
Warning signs:
- Anonymous teams: Be wary of projects where team identities are anonymous.
- Unusual or non-existent token economy: Watch for large chunks of tokens held by some wallets.
- Lack of auditing: Legitimate projects often have their smart contracts audited.
- Excessive hype: Be careful if the project relies heavily on marketing rather than substance, this is a key point.
- Promise of quick profits: Promises of high returns in a short time are a classic sign of a scam.
Conduct research:
- Community Comments: Find real discussions and comments from the community.
- Work history: Check the team's previous projects and reputation.
- Smart contract audit: Check if the contract has been audited by a reputable company.
Conclusion
Don’t invest in a meme coin, maybe just for fun, but don’t take it as a serious project. Understand that there is a high chance of getting scammed. There are many great projects that can generate 1000x returns without fuss and with long-term planning, and that is the only way to build something of value
