Trader makes $200,000 profit by scamming fake memecoins

Not all cryptocurrencies launched on the market survive. In fact, only 3 out of 100 of them manage to thrive, and many are outright scams. This is how one trader managed to profit more than US$200,000 by selling fake tokens that pretended to be memecoins.

According to reports, the trader managed to deceive investors for weeks, earning up to $60,000 per week through fake sales.

Trader applies scam with “memecoins”

Recently, a YouTuber named NFT Nate interacted with Phantom, an anonymous cryptocurrency trader, to learn about his money-making skills with the rugging. This is a popular term for fraudulent and deceptive practices where people take advantage of vulnerable situations to make large profits.

In a discussion with NFT Nate, Phantom outlined simple ways to make money with minimal capital. In the conversation, the trader revealed that he managed to make over $200,000 profit using fake memecoins.

The approach Phantom is working on is called “mass sniping,” in which a new token is created using just a few tools on platforms like Pump.Fun, a token generator, and DogWiffTools. Phantom then uses the fake tokens to attract potential buyers by showing high demand for the token.

This generator allows any user to create and distribute new custom tokens, especially memecoins. The tokens have all the appearance of being real projects, including fake wallets and purchase records, manipulating new buyers.

Since a significant amount of buyers invested in these tokens, Phantom used a command called “dump all” and sold all of its assets at once, crashing the token market.

As a result, investors will end up with worthless assets, while the trader pockets all the profits. A classic rug pull strategy.

Pump.Fun employee arrested for deceiving users

NFT Nate’s video highlighted how scammers are utilizing memecoins to create scams. Tools like Pump.Fun have equipped people with hefty profits while scamming others out of their money.

However, the action is not limited to this single cryptocurrency trader, as many others have resorted to this practice. Including a former Pump.fun employee was arrested after stealing $1.9 million by scamming people with this platform.

Interestingly, he advised users to stop using Pump.fun and withdraw their funds due to the company’s “sick plans.” Additionally, NFT Nate also hinted at the high presence of such scams in the market.

According to NFT Nate, over 98.5% of tokens, especially memecoins, are dumped before they even reach any exchange.

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