Rugging, a term for deceptive and fraudulent crypto practices, is widespread in some parts of the crypto industry, with some individuals, such as self-proclaimed meme coin logger ‘Phantom’, exploiting vulnerabilities to generate significant profits.
Phantom, an anonymous crypto trader, revealed how he exploits the meme coin market on Pump.Fun to amass significant profits, averaging 400 SOL per week, which amounts to approximately $60,000 to $65,000.
In an interview with crypto YouTuber NFT Nate, Phantom described the process as “brain dead easy,” emphasizing that anyone could implement these plans with minimal capital. His approach involves setting up what he calls a “mass sniper,” a method that uses tools like DogWiffTools to trick potential buyers into thinking there is real demand for a token.
Phantom’s strategy involves creating and launching tokens in rapid succession, relying on automated systems to make it appear as if multiple wallets are purchasing the tokens. This creates an illusion of organic interest, attracting unsuspecting investors who then buy the tokens at high prices. Phantom and others using similar methods can then execute a “dump all” order, selling their holdings in a single, quick transaction, causing the token’s price to crash and leaving legitimate buyers with worthless assets.
Even former Pump.Fun employees have gotten in trouble for abusing the system, with one arrested for scamming them out of $1.9 million. He then advised users to withdraw funds and claimed that Pump.Fun considered the platform’s TVL as its own money in a complaint against him.
The interview sheds light on the scale and ease of these operations, with Phantom candidly discussing how easy it is to create new tokens and continually run these scams. Using advanced tools, like DogWiffTools, allows carpet pullers to automate much of the process, from generating multiple wallet addresses to setting delays that make the purchasing pattern seem more realistic.
As NFT Nate investigated the mechanics of these scams, he discovered that the majority of tokens launched on platforms like PumpFun are carpets, with an overwhelming 98.5% of them being dumped before they even reach exchanges like Radium. The statistics presented by Phantom are staggering, highlighting that of the nearly 2 million tokens launched, only a tiny fraction achieve any lasting value, and even fewer achieve significant market capitalization.
The implications of these practices are serious and reinforce the cutthroat, person-to-person nature of the memecoin crypto market. Phantom’s comments suggest a grim reality: In the memecoin world where many projects are questionable, he believes it’s often a choice between scaring the hell out of others or being badass himself. While this mentality is far from ethical, it reflects a pervasive attitude among some participants in the memecoin ecosystem.
NFT Nate’s investigation into these rug-pulling tactics is a stark warning to the crypto community. The tools and methods used by scammers like Phantom are becoming increasingly sophisticated, making it harder for even experienced traders to avoid falling victim to these schemes.
