Rugging, a term used to describe deceptive and fraudulent practices within the crypto industry, continues to be a prevalent issue, with individuals like the self-proclaimed meme coin rugger known as “Phantom” taking advantage of vulnerabilities to make substantial profits.
Phantom, an anonymous crypto trader, recently shared insights into how he exploits the meme coin market on Pump.Fun to generate significant profits, averaging around 400 SOL per week, which amounts to approximately $60,000 to $65,000. In a recent interview with crypto YouTuber NFT Nate, Phantom explained his strategy, which he described as “brain-dead easy,” highlighting how anyone with minimal capital could execute similar schemes.
Phantom’s method involves setting up what he calls a “mass sniper,” utilizing tools like DogWiffTools to deceive potential buyers into believing that a token has genuine demand. By creating and launching tokens rapidly and leveraging automated systems to make it appear as though multiple wallets are purchasing the tokens, Phantom creates an illusion of organic interest. This lures unsuspecting investors to buy the tokens at inflated prices. Subsequently, Phantom and others using similar tactics execute a “dump all” command, swiftly selling off their holdings in a single transaction, causing the token’s price to plummet and leaving legitimate buyers with worthless assets.
Even former employees of Pump.Fun have faced repercussions for exploiting the system, as one individual was arrested for a $1.9 million scam. This individual warned users to withdraw their funds, claiming that Pump.Fun considered the platform’s TVL as its own funds in a complaint against him.
The interview with Phantom sheds light on the scale and simplicity of these operations, highlighting how straightforward it is to create new tokens and execute these fraudulent schemes continuously. The utilization of advanced tools like DogWiffTools allows rug pullers to automate various aspects of the process, from generating multiple wallet addresses to implementing delays that make buying patterns appear more authentic.
NFT Nate’s investigation into these rug-pulling tactics serves as a cautionary tale for the crypto community. The statistics shared by Phantom reveal that a vast majority of tokens launched on platforms like PumpFun are rugs, with an overwhelming 98.5% of them being dumped before reaching exchanges like Radium. This data underscores the harsh reality of the memecoin crypto market, where only a fraction of projects achieve lasting value and market success.
The implications of these fraudulent practices are significant, emphasizing the competitive and unethical nature of the memecoin space. Phantom’s perspective suggests that in this environment, it’s often a choice between exploiting others or becoming a victim of rug pulling oneself. While this mindset is concerning, it reflects a prevalent attitude among certain participants in the memecoin ecosystem.
As scammers like Phantom continue to refine their tactics with sophisticated tools, it becomes increasingly challenging for even experienced traders to avoid falling prey to these schemes. NFT Nate’s investigation serves as a crucial reminder for the crypto community to remain vigilant and cautious in navigating the volatile and risky landscape of meme coins.