Investors were unable to sell the Crypto Emperor Trump ($TRUMP) token, a honeypot scam, after it spiked 54,737% before plunging to almost nothing.
The token Crypto Emperor Trump ($TRUMP) has once again been the target of a rug pull in the cryptocurrency market.
The price of the $TRUMP token increased 54,737% in just five days, from $0.001693 on November 15 to a peak of $0.9284 on November 20, according to Coinmarketcap. But this quick ascent was short-lived, as investors suffered large losses when the token’s price fell to nearly zero ($0.000015).
At the time of writing, Uniswap v3 (Base) was the most active exchange for $TRUMP, accounting for the majority of the 24-hour trading volume at $12,698,120.
The Honeypot Trap
Intense social media activity, with multiple posts endorsing the token and urging investors to purchase it, drove the sharp price increase. Because of the resulting sense of urgency and FOMO, many people made investments without carrying out the necessary due diligence.
The $TRUMP token, however, turned out to be a traditional honeypot scam. The purpose of honeypot tokens is to draw in investors and keep them from liquidating their holdings.
Some investors took to social media platforms like Reddit or X to express their frustration and disappointment. Many reported being unable to sell their $TRUMP tokens, confirming the honeypot nature of the scam. Some investors even suggested that the token may have been specifically designed to target users of Coinbase Wallet, as they were unable to sell the token on that platform.
The availability of scam tokens like $TRUMP on Coinbase Wallet has also raised concerns among the cryptocurrency community. A user with the nickname @XReviewBeast said on X: “It’s concerning that scam tokens like ‘Crypto Emperor Trump’ are available on Coinbase Wallet. This token acts as a honeypot, preventing buyers from selling. Platforms should restrict contracts with such exploitative mechanisms to protect users.”
We regularly monitor the assets on our exchange to ensure they meet our listing standards. Based on our most recent review, Coinbase will suspend trading for wBTC (wBTC) on December 19, 2024, on or around 12pm ET.
— Coinbase Assets 🛡️ (@CoinbaseAssets) November 19, 2024
Pump-and-Dump Scheme Exposed
An analysis of ChainDefenders on X revealed that a small number of interconnected addresses held a substantial amount of the $TRUMP token supply, with seven of the top holders being associated with a single contract, indicating a concerted attempt to regulate the token’s distribution and price.
The sudden purchase of $TRUMP tokens by a large number of previously dormant addresses led to a spike in trading volume. Pump-and-dump schemes, in which a group of people artificially inflate the price of a token before selling it off at a profit, are characterized by this behavior.
🚨 Red Flag Alert 🚨 Another #TopGainerTrap for today is Crypto Emperor Trump (TRUMP) on Base 0xCfbDAA56F1945e377fFdF38a5612c37f48819927
— ChainDefenders (@ChainDefendersX) November 18, 2024
🔍 Suspicious Activity: Analysis reveals that the 7 top holders of $TRUMP are all tied to a common contract. Additionally, tens to hundreds of… pic.twitter.com/tzRkPWlKBt
91% of Base Meme Coins at Risk
A recent analysis of over 1,000 new tokens on the Base chain, mostly meme coins, also raised concerns about their security and legitimacy.
908 projects were found to have violated one or more basic security standards, according to the study. These consist of verified contracts, locked liquidity, and the lack of honeypots.
The study suggests that this lack of security may result from attempts to troll the industry or from creators’ ignorance of appropriate protocols.