A new method used by fraudsters has emerged, catching Solana (SOL) holders off guard on the Pump.fun platform, leading to significant losses. Going by the pseudonym “Short Form King”, a crypto researcher sheds light on this new trend and exposes the tactics used by these fraudsters.
Rising Threat To Solana Holders
A recent social media post by Short Form King reveals that the scammers behind common schemes have devised a new method that manages to fly under the radar of most people’s research processes, making it particularly effective and detrimental to unsuspecting Solana holders.
According to Short Form King, scammers employ “well-crafted” meme coins and “experienced teams” to create the illusion of an ordinary coin, deceiving even seasoned traders.
The researcher cites the example of NOFEAR, a recent token that garnered a lot of attention due to endorsements from key opinion leaders (KOLs). However, the project turned out to be a scam, and its value plummeted after the team manipulated the supply.
Given the growing popularity and common use of these crimes to identify potential rug pulls, Short Form King highlights several red flags investors should be vigilant about.
First, a lack of comments or engagement in the “thread” section under the coin on the Solana-based meme coin trading platform Pump.fun indicates that the coin was not listed for long before completing its binding curve, serving as an initial indication of malicious intent.
Additionally, Short Form King notes that the “Trades” section on Pump.fun platforms holds crucial information, often overlooked by 90% of investors once the coin hits major decentralized exchanges (DEXs).
Unusual buying patterns, with no corresponding sell orders and limited trading history, can also indicate a rug pull in progress. Moreover, the absence of previous Pump.fun coins or any relevant experience serves as a dead giveaway that a coin may be vulnerable to rug pulls.
How Fraudsters Outsmart Platforms Like Bubblemaps
The researcher also claims that fraudsters often manipulate their profiles to avoid detection by platforms such as Bubblemaps, an auditing tool for decentralized finance (DeFi) tokens and non-fungible tokens (NFTs).
They allegedly employ “washing” services like Solnado or fund their accounts from multiple “unlinked centralized exchanges,” creating the illusion of separate individuals.
Short Form King highlights that these accounts typically show minimal activity until they combine all the funds into a single wallet to finally execute the rug pull, leaving mostly Solana investors with substantial losses.
At the time of writing, SOL is trading at $162, erasing all losses in all time frames after hitting a two-month low of $121 in early July. Currently, the fifth largest cryptocurrency on the market is posting gains of 5% and 10% in the 24-hour and monthly time frames.
Featured image from DALL-E, chart from TradingView.com