Scammers made tens of thousand of dollars on bitcoin pizza day

Scammers took advantage of market participants’ interest in meme cryptocurrencies on “bitcoin pizza day”

Scammers earned tens of thousands of dollars on “bitcoin pizza day. In doing so, taking advantage of market participants’ interest in meme-based cryptocurrencies. The creators of several holiday-themed tokens absconded with the assets of gullible investors.

On May 22, the cryptocurrency community celebrated the 13th anniversary of the first purchase for bitcoins. It happened in 2010, when computer developer Laszlo Heinitz bought two mushroom pizzas for 10 thousand BTC.

According to Dextools, the capitalization of tokens BTCPizza, BPizza, PizzaDay and EthPizza. Which were created during the last week, at their peak reached about $150 thousand.

The creators of BPizza, after the token reached a capitalization of $100k, imposed a 100% sales tax on the coins. This was done to prevent investors from selling them. Issuer EthPizza disabled token sales when the asset’s capitalization reached nearly $40k.

BTCPizza is now labeled as a Honeypot – where fraudsters prescribe in the token’s smart contract the ability to withdraw coins only to certain wallets. PizzaDay plummeted in value to zero after a spike in value followed by a rapid series of sales.

Our experts noted that the desire of investors to buy tokens with no fundamental value. And all this followed a rapid and significant rise in the market capitalization of the meme cryptocurrency Pepe in just a few weeks. Investors are hoping to get lucky, buying tokens that could collapse in value at any moment. And then they complain that they were scammed and media didn’t warn them that it was dangerous. So once again we warn you that you can lose 100% of your investment in such projects.

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What is PEPE cryptocurrency and how it set the trend for new memecoins

Our experts told us how PEPE new token appeared on major cryptocurrency exchanges in three weeks of existence. And resulted in the appearance of dozens of analogs, and who made money from it

In early April, the @pepecoineth account appeared on Twitter. And the only entry in which was an image of the famous meme with Pepe the frog wearing a red cap with the inscription “Make Memecoins Great Again”. So say this is a similar slogan to former U.S. President Donald Trump’s presidential slogan.

Two weeks later, the cryptocurrency token PEPE was launched, taking its name from a popular meme. Anonymous developers issued 420.69 trillion coins. And token trading was launched on the decentralized exchange Uniswap.

The discussion of PEPE was picked up by Influencers on Twitter and in the thematic channels of the messengers Telegram and Discord. And just one day after its debut, its price rose by more than 900%. In less than three weeks, the market capitalization of this memcoin exceeded $1.6 billion. At the time of our publication, the token is among the top three memcoins, second only to Dogecoin (DOGE) and Shiba Inu (SHIB).

High demand for meme coins

This rise in Pepe quickly led to the emergence of dozens of new memcoins. And those of them that turned out to be rumored also skyrocketed in price by tens or even hundreds of percent. Many of these tokens lack liquidity. This means that traders have limited ability to buy and sell them close to the market rate. Because of this, tokens are susceptible to sharp price fluctuations. And any of the relatively large buy orders pushes their prices higher and vice versa. Professional traders take advantage of this, whose bots can track such bids to their completion. And put their own ahead of the other players.

The PEPE token was initially traded only on decentralized crypto exchanges. And the increase in trading volume on which leads to an increase in the number of transactions on the Ethereum blockchain. During the hype surrounding PEPE and other meme tokens, activity on Uniswap and peers grew to the 2021 mark. When Bitcoin and the crypto market as a whole reached historic price highs. This, in turn, led to an increased load on the network. And as a consequence, Ethereum’s commissions increased dramatically. Now buying memcoins on DEX or any other direct interaction with the network can cost up to $50 in ETH cryptocurrency.

High commissions, as well as technical peculiarities of decentralized exchanges, partly deterred the influx of ordinary retail traders. But realizing the scale of the excitement, traditional crypto-exchanges began to announce PEPE listings. Among them are OKX, Bybit, KuCoin, Poloniex, Bitget and others. BitMEX was the first exchange to launch trading in perpetual PEPE futures with up to 50x leverage.

PEPE listing on Binance

The world’s largest cryptocurrency exchange, Binance, held back for a while. But at the beginning of May, its head Changpeng Zhao told during a question-and-answer session with subscribers. That even though he doesn’t understand memcoins himself. And has never traded them, if there is a demand, his platform always goes towards users. It became clear in the cryptocurrency community that listing PEPE on Binance is a matter of time. And the exchange did add the token a few days later.

According to CoinMarketCap, PEPE trading volumes from May 9 to 10 exceeded $420 million, despite the token’s price drop. The service’s statistics also show that trading volumes quickly moved from Uniswap to Binance. More than $160 million worth of PEPE trades were made on Binance in a day, compared to $55 million on Uniswap. The accessible interface and much lower fixed commissions obviously played a role in this. According to DEXTools analytics service the number of unique PEPE token holders exceeded 100 thousand on May 10.

Not just a meme

In 2005, illustrator Matt Furey released a webcomic called Boy’s Club. And it featured a frog named Pepe. The character appeared frequently in Furey’s work. And then migrated to the Internet and spawned thousands of memes. Fury himself, answering his subscribers’ questions, said he knew nothing about this token. And ironically called himself a “Dogecoin maximalist.

Dogecoin, created in late 2013 by developers Billy Marcus and Jackson Palmer, was the first memcoin to hit the market. According to them, they created the coin as a joke. And its name was a reference to the popular meme “doge” with a shiba-inu dog named Kabosu. Unlike Bitcoin’s payment function or Ethereum’s decentralized application ecosystem. Then Dogecoin originally had no purpose other than to irony the nascent crypto market of the time.

That hasn’t stopped the coin from skyrocketing in popularity, helped heavily by Tesla CEO Elon Musk. According to CoinMarketCap, Dogecoin has a market capitalization of more than $10 billion. After the rapid growth of DOGE in 2021, a flood of memcoins flooded the market. Including Shiba Inu, another dog-inspired meme token and one of the top 20 largest crypto assets.

The activity and excitement around PEPE is partly reminiscent of the recent rise of BONK. It is another memcoin with a siba-inu as a symbol, launched earlier this year on the Solana blockchain. During the New Year holidays, the token soared in price in a similar way. And provoked a surge of abnormal activity on decentralized exchanges. And it was added to the listing of major trading floors, including Bybit and Huobi. After the January highs, the price of BONK never returned to its peak values. And gradually declined despite the overall growth of the market.

Dog memes are no longer popular ?

“The dogs have had their day,” the developers of PEPE wrote, “it’s time for Pepe to take over”. The creators of the token run it socially anonymously. And the coin’s website lacks any contact information. The first press release mentioning PEPE was published April 19 on behalf of David Costla. Another press release about the creation of another memcoin, DanGPT, the “daring twin of ChatGPT,” is signed by the same name. The developers have ignored attempts by journalists to contact them through any available channels.

Our experts point out that when Elon Musk posted a meme on Twitter with an image of NFT from the Milady collection. That the rate of Milady Meme Coin (LADYS) token, created the day before, increased almost 120 times. The capitalization of the coin reached $136 million in less than a day. Blockchain transaction researchers noticed that the owners of some Ethereum wallets, which earned hundreds of thousands of dollars on the growth of the PEPE rate. And they were also buying up LADYS in advance of the new token’s price jump.

So we can safely say no matter what meme the crypto project is dedicated to. If there is hype around it, it will grow in price, but it won’t last long. Be careful investing money in such coins can lead to significant financial losses.


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One scammer launched 114 scam meme tokens in 45 days

Blockchain researchers note the “incredible diligence” of the developers of scam dubious coins. And they note that every day several new cryptocurrencies are released from the address scammer.

One scammer launched 114 scam meme cryptocurrencies in the past 45 days, a blockchain researcher under a nickname ZachXBT reported on Twitter. According to him, each time the funds received as a result of the fraudulent scheme were sent to the same address.

“I suspect that there are even more of them [issued cryptocurrencies]. These are just the ones sent to the same address,” ZachXBT added.

He attached a diagram that shows the “scam tokens” with names. Which refer to famous brands, such as KingKong, BBC, TrumpMind, Arbitreum, Mozilla, SpeechAI, PEPAPIG, are redirected to one address on the Coinbase exchange.

Users on social media noted that the scammers are acting like “criminal geniuses,” sending funds to a large centralized exchange, thereby giving themselves away. ZachXBT suggested that Coinbase had not detected the fraud because the transfers were coming in small amounts.

On April 27, a social network user under the pseudonym Guru also reported another similar case. In doing so, pointing to the address of a cryptocurrency wallet, which allegedly launched 2-5 memcoins daily for almost two years in a row.

“These developers have an incredible work ethic. Make sure you take note of their address on Etherscan. So you don’t fill their pockets with your money. Absolute insanity,” he wrote.

Our experts point out that scammers take advantage of the fact that meme tokens are popular in the cryptocurrency community. And in doing so, despite the fact that they do not bear any practical benefit. For example, new meme coins were launched in mid-April. Which are associated with famous Internet memes – Pepe the frog and Wojak the character. Their value rose by hundreds of percent after the launch. And now dozens of projects are launched every day that use PEPE, etc. in the name. Be careful 99% of these projects will be shut down within days of launch.

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