An unidentified trader turned a small investment into nearly half a million dollars with a newly launched memecoin, just before the token plummeted in value, raising suspicions of insider trading amid recent issues with memecoins.
This shrewd investor achieved an astonishing return of over 1,500 times their initial stake, transforming a mere $304 into more than $482,000 within a single day on the Bubb (BUBB) memecoin.
The trade occurred shortly before the token’s value dropped more than 50%, with its market capitalization having peaked at approximately $43.7 million on March 21 at 10:00 p.m. UTC, only to fall to about $22.6 million shortly thereafter, according to market data.
Investor interest in the Bubb token surged on March 20, spurred by a comment from Binance’s co-founder and chief customer service officer, which traders interpreted as a hint at a possible listing on the platform.
The significant profit made by this trader has led to allegations of insider trading among others in the market. One crypto investor voiced their frustration, suggesting that posts related to insider deals should be tagged for easier muting, highlighting the sentiment of some who would rather remain unaware of such activities.
This recent profitable trade comes on the heels of another memecoin’s dramatic fall, where a token inspired by the Wolf of Wall Street experienced a 99% crash, indicating potential insider actions prior to its collapse.
The creator of the Wolf (WOLF) token had aimed to capitalize on rumors involving the infamous Jordan Belfort, but to their dismay, a concentration of 82% of the token’s supply was held by a single entity, leading to alarming market dynamics.
In light of the recent volatility surrounding politically backed memecoins, there have been calls for stronger investor protections and economic safeguards. Reports suggest implementing measures like liquidity locking or restricting the sellability of tokens for a certain timeframe to prevent similar scenarios to the Libra token collapse.
The consequences of the Libra scandal were severe, with a significant number of traders losing millions in investments, prompting a need for regulation to protect retail investors from being exploited by well-informed or well-funded entities. This sentiment is echoed by industry leaders advocating for fair launch practices to ensure equitable access for all participants in the market.