A Memecoin investor had to pay a heavy price for his mistakes. The trader lost over 340,000 US dollars in one minute. How the faux pas could have happened.
Memecoin Trader Loses Over $340,000 in a Minute Due to Fraudulent Transaction
A memecoin trader has reportedly lost more than $340,000 in less than a minute, according to the on-chain analysis service Lookonchain on X (formerly Twitter). The incident involved two transactions on Solscan, revealing a significant financial mishap.
On June 18, the trader attempted to exchange 2,500 SOL (approximately $342,000) for the newly launched TrumpCoin (DJT) using a trading bot. However, instead of receiving the legitimate DJT tokens, the trader was duped into obtaining 92,000 fake DJT tokens created by fraudsters. These fraudulent tokens were worth significantly less than the genuine ones.
The transaction took place through a “fake” liquidity pool on Raydium. This pool was not sufficiently funded and was filled with DJT tokens created by scammers. When the trader attempted to convert the DJT tokens back to Solana, the scam became evident. Unfortunately, by this point, it was too late, and the trader’s initial 2,500 SOL had dwindled to just under 5 SOL—a loss of over $340,000. For the fake DJT tokens, the trader received only $673.
The DeFi (decentralized finance) space is rife with such scams, where fraudsters set up fake liquidity pools to exploit traders’ mistakes. Some decentralized exchanges (DEXes) issue warnings to users about these scams, but trading bots typically do not provide such alerts. This lack of warnings is especially problematic with newly launched coins, where traders can easily fall into the trap of exchanging for the wrong tokens.
This incident highlights the perils faced by crypto investors beyond the usual price volatility. The affected trader remarked on X, “Life goes on,” reflecting a resigned acceptance of the loss.
Despite this unfortunate event, the world of memecoin trading has its success stories. Some traders have achieved remarkable profits in short periods. For instance, one trader became a millionaire in just five hours, while another made a profit of $9.5 million in ten days by trading the celebrity token MOTHER, associated with US rapper Iggy Azalea.
This stark contrast between potential gains and significant losses underscores the high-risk nature of the cryptocurrency market, particularly in the memecoin sector. Investors are reminded to exercise extreme caution and conduct thorough research before engaging in such trades.