Rugging, a term for deceptive and fraudulent crypto practices, is prevalent in certain sectors of the crypto industry, as seen with individuals like the self-proclaimed meme coin rugger “Phantom” exploiting vulnerabilities for significant profits.
Phantom, an anonymous crypto trader, shared insights on how he takes advantage of the meme coin market on Pump.Fun to earn substantial profits, averaging 400 SOL per week, equivalent to $60,000 to $65,000.
In an interview with crypto YouTuber NFT Nate, Phantom described his method as “brain-dead easy,” highlighting that anyone with minimal capital could engage in these schemes. His strategy involves utilizing a “mass sniper” technique with tools like DogWiffTools to deceive potential buyers into believing a token has genuine demand.
Phantom’s approach includes creating and launching tokens rapidly, using automated systems to make it appear as if multiple wallets are purchasing the tokens. This creates a facade of genuine interest, attracting unsuspecting investors who purchase tokens at inflated prices. Subsequently, Phantom and others executing similar strategies can sell off their holdings in a single swift transaction, crashing the token’s price and leaving legitimate buyers with worthless assets.
Former employees of Pump.Fun have faced legal issues for exploiting the platform, with one individual arrested for a $1.9 million scam. He advised users to withdraw funds, suggesting that Pump.Fun considered the platform’s TVL as its own funds in a complaint against him.
In the interview, Phantom openly discusses the simplicity of creating new tokens and continuously executing these scams. The utilization of advanced tools like DogWiffTools enables rug pullers to automate various processes, from generating multiple wallet addresses to creating delays that mimic authentic buying patterns.
NFT Nate’s investigation reveals that the majority of tokens launched on platforms like PumpFun are rugs, with a staggering 98.5% being sold off before reaching exchanges like Radium. Phantom’s statistics emphasize that out of nearly 2 million tokens launched, only a small fraction hold lasting value, and few achieve significant market caps.
These unethical practices highlight the ruthless nature of the memecoin crypto market. Phantom’s observations paint a stark reality, suggesting that in the memecoin space, individuals must choose between exploiting others or falling victim to exploitation themselves.
NFT Nate’s exploration of rug-pulling tactics serves as a cautionary tale for the crypto community. Scammers like Phantom are employing increasingly sophisticated tools and methods, making it challenging for even experienced traders to avoid falling prey to such schemes.
