The Solana (SOL) ecosystem token has been tumbling recently as the entire cryptocurrency market has been hit by bearish sentiment. Additionally, investor confidence in the Solana network has been shattered due to the recent memecoin pre-sale scam craze. Cryptocurrency detective ZachXBT uncovered a massive scam earlier this month involving the Solana memecoin pre-sale event.
Solana meme coin pre-sale scam
According to a post on X by ZachXBT, the total amount of SOL raised by the recent Solana meme coin project is over 796,000 SOL (equivalent to $149.2 million) across 33 pre-sales. Additionally, we witnessed the project being tough and highlighted several fraudulent accounts that refused to initiate SOL refunds.
ZachXBT revealed on the pre-sale address by Sartoshi0x that he took a staggering 62% of SOL in the pre-sale and was unable to fully distribute the tokens as promised. Cryptocurrency Detective shared a screenshot of a transfer in which 4,434 SOLs worth over $800,000 earned for the Solana meme coin project MILK were transferred to a new address instead of LP.
Another case involves 2100 SOLs sent by Jared_eth to an address on X, which is purported to be a fake Jared MEV bot account. Prior to this, an investor fell victim to the scheme and transferred an additional $440,000 to a fake Jared account for the June 2023 pre-sale.
In another example, 3,300 SOL was sent to Blue Kirby, named after the scammer who fraudulently facilitated the pre-sale of the Solana meme coin. Initially, a refund was promised. But they decided not to refund investors, whom they had accused of being “scammers,” and withdrew the idea in a rambling article.
Additionally, Vombatus_eth's SORRY project fell into disrepair after a 13,000 SOL pre-sale, further compounding investor losses. The developer claimed to have distributed all the funds and moved the LP to the write address. Previously, amid growing concerns about these projects, Solana co-founder Anatoly Yakovenko sounded the alarm and discouraged people from investing in such projects.
Also read: ZachXBT, Solana Meme Coins raises $122 million in pre-sale, warns against scams
Is the SOL ecosystem leading the crypto market crash?
Bitcoin (BTC), Ethereum (ETH) and other major cryptocurrencies suffered huge losses today. Bitcoin fell below $62,000 and Ethereum bottomed at $3,100. Additionally, the cryptocurrency crash is believed to be led by the Solana ecosystem token.
That's because investors are losing confidence in the Solana network, especially its new meme coin. Moreover, these scammers may have sold off his acquired SOL, accelerating the price decline.
Earlier today, Solana's price plummeted nearly 12% to trade at $165. However, it rebounded noticeably and rose above $170. Despite the rebound, SOL price was down 7.50% to $171.31 at press time on Wednesday. Additionally, Solana DeFi TVL has plummeted to $3.86 billion after exceeding $4.5 billion this week.
Jupiter (JUP), the native token of Solana DEX aggregator Jupiter, fell 6.9% to $1.13. Meanwhile, Raydium price plunged 10.40% to $2. Orca (ORCA) also fell 10% to $4.04. Furthermore, Slerf, the newly launched Solana meme coin, fell 12.3% to $0.828 despite initially rising 1000%.
Slerf crypto sparked suspicions of involvement in a Ponzi scheme after its developer accidentally burned LP and 500 million airdrop tokens. With the casting rights revoked, presale investors lost $10.8 million with no chance of recovery.
Additionally, Dogwifat (WIF) plunged 6.7% to $2.15. On the contrary, other Solana meme coins such as Bonk (BONK) and Book of Memes (BOME) bucked this trend. Bonk price rose 7.8% to $0.0000224 and BOME rose 11.60% to $0.01259.
However, BOME also raised concerns about insider trading when listing on Binance. Binance has since started investigating the issue. The recent surge is considered a pump-and-dump plan by the cryptocurrency community. Therefore, the new Solana meme coin remains under scrutiny.
Also read: Solana co-founder asks users to stop transferring funds during pre-sales
