Memecoins' Wild West: Solana's Unregulated Market Beckons Scams

Sunday 23rd of March 2025 20:00:30

Solana Has Become a Breeding Ground for Pump-and-Dump Memecoin Cabals: Bloomberg

Solana, a popular blockchain platform, has become a hub for pump-and-dump schemes involving memecoins, according to a report by Bloomberg. Memecoins are a type of cryptocurrency that often have humorous or ironic names and are frequently used in pump-and-dump schemes.

The report found that Solana has become a breeding ground for memecoin cabals, with groups of traders working together to artificially inflate the value of a particular coin and then sell it off at a profit, leaving other investors with significant losses.

The scheme typically involves creating a new memecoin and then using social media and online forums to promote it, often with false or exaggerated claims about its potential. Once the coin has gained traction, the cabal will sell off their holdings, causing the price to plummet and leaving other investors with significant losses.

Bloomberg found that Solana has become a popular platform for these schemes due to its fast transaction times and low fees. This has made it an attractive option for memecoin creators and traders looking to quickly and cheaply move their coins around.

The report also noted that some of the memecoins being traded on Solana have names that are intentionally misleading or humorous, such as "LUNA-BOI" and "DogeCoinz." This has led some to question the legitimacy of these coins and the intentions of those behind them.

Solana has not commented on the report, but the platform has taken steps in the past to crack down on pump-and-dump schemes. In 2021, Solana introduced a new token listing process that requires projects to provide more information about their tokenomics and use cases.

Despite the risks associated with pump-and-dump schemes, many investors are still drawn to memecoins due to their potential for high returns. However, the report serves as a reminder of the importance of doing thorough research and due diligence before investing in any cryptocurrency.