The subreddit moderator allegedly swapped all of its WSB holdings to 334 ETH.
A WallStreetBets moderator has allegedly performed a rug pull, selling off a significant amount of the WSB Coin (WSB).
The WSB Coin (WSB) claimed to be an official memecoin token of the notorious trading subreddit project WallStreetBets.
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WSB Coin was launched on May 2nd by individuals moderating the WallStreetBets Reddit forum, which gained fame during the GameStop short squeeze in January 2021.
At that time, the creators of the WSB token promised a fair launch with no team allocation and a 10% reserve of coins for the subreddit. On its website, the team noted:
It’s the fairest launch memecoin you will find with no team allocation and no presale. Just a free airdrop and some coins for the community. 10% of the $WSB supply is reserved as a treasury for the r/wallstreetbets sub to do with as they please.
However, just days after the launch, one of the token's team members started dumping large quantities of WSB coins.
On-chain detective ZachXBT revealed on May 4th that "zjz.eth," who manages the subreddit's moderation bots, allegedly executed the rug pull on WSB investors. On-chain data indicates that the malicious actor exchanged WSB coins for 334 Ether (ETH), valued at approximately $635,000.
Following the massive token dump, the WSB Coin price plummeted from an all-time high of $0.00067279 to an all-time low of $0.00004827 within two days.
Community members took to various social media platforms to advise against purchasing the dip, cautioning that moderators still hold access to 10% of the total supply.
In the meantime, another moderator, known as WSBmod, has threatened to report the individuals involved in the dump to law enforcement agencies, including the FBI, if they fail to come forward. WSBmod also called on zjz.eth to return the funds.
As the situation unfolds, it serves as a stark reminder for investors to exercise caution and thoroughly research projects before investing, especially in the volatile world of cryptocurrencies.
The Memecoin craze has recently taken over the crypto industry, with Bitcoin's BRC-20 token standard becoming a hot spot for meme tokens following the recent surge in popularity of Pepe (PEPE) memecoin.
