Cryptocurrency, while a beacon of potential wealth, also harbors a dark underside of fraud and deception. Recently, a crypto trader known as Phantom has brought to light a scamming method that nets an astonishing $200,000 by exploiting meme-based cryptocurrencies.
Phantom, whose tactics were exposed by YouTuber NFT Nate, employs a method called “rugging,” which involves creating and dumping meme coins.
He leverages tools like Pump.Fun, a token generator, and DogWiffTools, which fabricate demand by showing falsified buyer activity. These tools enable him to create custom tokens that appear desirable to investors, setting the stage for a scam.
Once investors pour money into these seemingly promising tokens, Phantom uses a “Dump all” command to sell all his holdings at once. This action crashes the market for the token, rendering it worthless while he walks away with significant profits.
His operation highlights a critical vulnerability in the cryptocurrency market— the ease of manipulating investor trust and the minimal oversight that allows such schemes to flourish.
This scam is not isolated. A former employee of Pump.Fun was arrested for stealing $1.9 million through similar tactics, demonstrating a systemic issue within certain platforms.
The individual has since advised users to withdraw their funds from the platform, signaling deep-rooted problems within these trading tools.
NFT Nate’s insights reveal that approximately 98.5% of meme-based tokens are disposed of before even making it to crypto exchanges, which indicate a prevalent scamming culture.
The cryptocurrency world is in a continuous growth, and so are the tactics of its participants. Recent revelations about a trader known as Phantom, who reportedly made $200K through deceptive schemes, underscore the urgent need for tighter regulations and enhanced investor education.
Also Read: Australia’s ASIC Shuts Down 600+ Crypto Scams in 12 Months
