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Solana Memecoin Creators Tied to Crypto Influencer Hack and Manipulation Scandal

Published May 28, 2024 3:07 PM
Eddie Mitchell
Published May 28, 2024 3:07 PM
Key Takeaways
  • The team behind Solana memecoin CAT allegedly self-sniped their project, dumping $5+ million worth of the token.
  • According to investigators, they hacked a popular social media account with over 465k followers to manipulate prices on two crypto tokens.
  • The scammer allegedly conducted the hack using a SWIM swap.

Just as Solana’s (SOL) memecoin mania had seemingly come to an end, another scandal has erupted as investigations have revealed foul play within the market.

The team behind the Solana-based CAT memecoin has been implicated in a long-winded crypto pump-and-dump scheme that netted them a mere $36,000.

The CAT Connection

On May 26, the X account of a crypto influencer and trader known as “GCR” was allegedly hacked by the team behind the CAT memecoin, and leveraged to manipulate the market.

Crypto sleuth ZachXBT explains that they “sniped” their own project and used the proceeds to execute a pump-and-dump through GCR’s X account  which has some 465k followers. A “sniping attack” in this context refers to the team fraudulently buying their own tokens before they are public, namely CAT, and then selling them entirely after trading begins.

According to X investigator ZachXBT, the Sol team sniped 63% of the total CAT supply (632 million CAT) and sold it for $5+ million before distributing the profits across multiple wallets. Using on-chain analysis, Lookonchain came to the same conclusion, attributing the movement as a likely insider from Sol/CAT.

As ZachXBT points out, the Sol team opened long positions in ORDI ($2.3 million) and ETHFI ($1 Million) just before the hack. Once everything was in place, the hacker began posting about ORDI and ETHFI causing some price action, netting a profit of around $34k and a loss of about $3.5k respectively.

Poor Execution

In his closing remarks, ZachXBT notes how stupid this whole situation is. “Scammers are low IQ as evident by the awful execution,” he wrote , adding:

“People let a scammer farm them for 7 figs just bc they purchased an expensive username and made mysterious posts. Stop giving meme coin callers a platform.”

The breach was made possible through a SIM swap attack, in which scammers trick mobile providers into transferring a victims phone number to a new SIM card that they control. From there, they can effectively bypass any two-factor authentication and security someone may have set up to prevent such things.

Faith in memecoins, especially Solana-based ones, appears to have hit another low as the network stumbles through network outages, transaction failures, and of course swathes of highly speculative, fraudulent, or racist tokens.

Memecoin Market Woes

Though it is not certain, the scammers could have made off with significantly more money than ZachXBT and Lookonchain estimate, and they may still have positions on centralized exchanges.

Faith in memecoins, especially Solana-based ones, appears to have hit another low as the network stumbles through network outages, transaction failures, and of course swathes of highly speculative, fraudulent, or racist tokens.

ZachXBT reminds us that memecoins are just as likely to be manipulated as venture capital coins.

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