A recent incident involving the moderators and users of WallStreetBets (WSB) subreddit has sparked controversy in the cryptocurrency world. On May 2, the WSB token was launched as the official memecoin of the subreddit, which gained notoriety for the GameStop short squeeze in January 2021. The token creators claimed that the token’s launch would be fair and that 10% of the coins would be reserved for the subreddit.
However, just days later, one of the token’s team members, operating under the username zjz.eth, dumped a large portion of the WSB tokens. On-chain data showed that the user had sold WSB coins in exchange for 334 Ether (ETH), worth around $635,000. The price of the token plummeted after the dump, going from an all-time high of $0.00067279 to an all-time low of $0.00004827 in just two days.
Despite warnings from community members, some users bought the dip, as they believed the moderators still had access to 10% of the total supply. This incident has raised questions about the authenticity and trustworthiness of cryptocurrencies and the people behind them.
One of the moderators of the subreddit, WSBmod, has threatened to report those involved in the dump to the police and the FBI if they do not reach out. The moderator urged the user zjz.eth to return the money. The incident has caused outrage among the community, with many voicing concerns about the lack of transparency in the cryptocurrency space.
This incident is not the first time that cryptocurrency users and investors have been burned by rug pulls. A rug pull happens when a developer or an individual sells off their entire holdings of a token, causing the price to plummet and leaving other investors with worthless tokens. Rug pulls are often carried out by scam artists looking to make a quick profit at the expense of unsuspecting investors.
It is important to note that not all cryptocurrency projects or tokens are scams. However, it is critical for investors to do their due diligence before investing in any crypto project. Investors should also be wary of promises of quick returns or investment opportunities that seem too good to be true.
To avoid falling victim to rug pulls and other cryptocurrency scams, investors should carefully research the token’s team, check for transparency, and pay close attention to the token’s history of price fluctuations. Investors should also avoid investing in tokens that promise high returns without any real-world use cases or projects.
Moreover, users should be cautious when investing in memecoins or tokens that are launched by online communities. While these tokens may initially seem like a fun way to support a cause or community, they may also be more susceptible to manipulation by community insiders or rug pullers.
In conclusion, the WSB token incident highlights the need for investors to be cautious and vigilant when it comes to investing in cryptocurrencies. The lack of regulation and oversight in the industry means that users must take extra steps to ensure the authenticity and trustworthiness of a project or token. By doing so, investors can avoid falling victim to rug pulls and other cryptocurrency scams and protect their investments.
