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Meme Coin Fraudsters Profit Over $200K in Rug Pulls

Meme coin traders have poured in money to several pizza-related tokens on Monday – but fell victim to a rug pull on the anniversary of the first purchase made with bitcoin.

Bitcoin Pizza Day, also known as the day commemorating the first commercial bitcoin transaction, has turned the day sour for some meme coin traders.

Meme coin issuers have profited over $200,000 from pizza-related-token rug pulls on the 13th anniversary for what’s reportedly known as the first commercial bitcoin transaction.

Data from dextool’s “live new pairs” section shows that there have been 14 pizza-related meme coins issued in the past 24 hours – four of which have been confirmed as rug pulls.

Rug pulls are schemes in which scammers steal money from investors through setting up a project and then suddenly running away with investor funds.

At least five other projects are suspected of being so-called honey pots – a method of scam where an asset can only be sold to the contract creator, resulting in purchasers holding tokens they cannot get rid of.

Bitcoin Pizza Day has a calendar date of May 22. Dating back to 2010, it commemorates developer Laszlo Hanyecz’s purchase of two pizzas for 10,000 bitcoin –  where the bitcoiner ‘holiday’ got its name from.

The first meme coin, called pizza coin (PIZZA), lasted only for eight minutes before its developers altered the rate of sales tax, resulting in investors being unable to divest their holdings. 34 traders in total had bought the token, resulting in a total loss of 0.9892 ETH ($1,800).

Despite news of such failed investments floating around in crypto circles, investors still flocked to tokens that commemorate Bitcoin Pizza Day – pouring in capital to tokens like ‘bitcoin pizza’ and ‘pizza inu’, which resulted in losses of more than $12,000 in total.

The fraud doesn’t stop there: investors fell for tokens like ethpizza and bpizza, which have reached a $40,000 market cap and $100,000 market cap respectively. Both ethpizza and bpizza’s contract creators then paused transfer and sales, resulting in investor losses after the rug had been pulled.

Rug pulls can be conducted by developers in multiple ways. Some developers add a modifiable sell tax to the smart contract, which grants the contract owner the ability to raise the tax to astronomical amounts so that the token cannot be sold further. Another method – and more common – is where a smart contract owner holds a vast majority of a token and waits for the price to rise, then selling it into freshly formed liquidity from unsuspecting investors.

Meme coins have been the latest rage amongst investors hoping to make it big with tokens that have no fundamental value. Kickstarted by pepe’s momentous rise to a $1 billion market cap, meme coin investors are eager to keep watch (and keep investing) into a myriad of meme coins to hopefully board the next hype train with a risk appetite that knows no bounds.

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