Fraudsters Exploit Bitcoin Pizza Day, Amass Over $200K in Rug Pull Scams
May 22, 2023
Crypto & Blockchain
On the 13th anniversary of what is widely regarded as the first commercial Bitcoin transaction, Bitcoin Pizza Day took an unfortunate turn as meme coin issuers capitalized on the occasion. These unscrupulous actors managed to profit over $200,000 through rug pulls associated with pizza-related tokens.
Bitcoin Pizza Day, observed on May 22nd, originates from 2010 when Laszlo Hanyecz, a computer developer, famously bought two pizzas for 10,000 bitcoins.
Data from Dextools' "live new pairs" section reveals that in the past 24 hours, a total of 14 pizza-themed meme coins were launched. Of these, four have been confirmed as rug pulls, schemes that entail stealing funds from investors through various deceptive techniques. Additionally, at least five others are suspected to be honey pots, leaving purchasers with illiquid assets that cannot be easily traded.
The first meme coin introduced was Pizza Coin (PIZZA), which lasted a mere eight minutes before developers adjusted the sell tax rate, rendering investors unable to sell their holdings. Out of 34 traders who purchased the token, the total loss amounted to 0.9892 ETH ($1,800).
Undeterred, investors subsequently flocked to tokens named Bitcoin Pizza and Pizza Inu, collectively incurring losses exceeding $12,000.
Following suit were Ethpizza and Bpizza. Ethpizza reached a market cap of $40,000, while Bpizza soared to over $100,000. Both tokens became unsellable as the contract owner paused transfers and sales.
Developers have various methods to execute rug pulls, one of which involves incorporating a modifiable sell tax into the smart contract. This grants the contract owner the ability to raise the tax to a level that renders the tokens unsellable. Another common approach is for the contract owner to hold a substantial majority of the tokens, awaiting a price surge before selling into the liquidity created by unsuspecting investors.
The investor appetite for these tokens, which lack any inherent value, stems from the recent "meme coin mania" following the momentous rise of Pepe, a meme coin that achieved a $1 billion market cap. Investors appear eager to capture the next hyped-up token in a market that carries substantial downside risks.
It is crucial for investors to exercise caution and conduct thorough research before engaging in meme coins or any speculative investment. The allure of quick profits and viral trends should not overshadow the importance of due diligence and understanding the potential risks involved. As the meme coin market evolves, it is essential for investors to remain vigilant and approach such investments with a measured perspective, prioritizing responsible financial decision-making.
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