Memecoins: From social experiment to retail ‘value extraction’ tools
Memecoins are evolving into retail investor traps, with insider trading and rug pulls raising regulatory concerns, industry observers told Cointelegraph.
Memecoins, once seen as community-driven digital assets, are increasingly being used to exploit retail investors, with a growing number of scams and failed celebrity-backed tokens raising regulatory concerns.
The $4 billion collapse of the Libra (LIBRA) token, which was endorsed by Argentine President Javier Milei, is the latest blow to the sector after eight insider wallets cashed out $107 million in liquidity, leading to a price decline of 94% within hours of its launch.
The rise of memecoin-related scams presents significant regulatory challenges, according to Anastasija Plotnikova, co-founder and CEO of blockchain regulatory firm Fideum.
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Author: Zoltan Vardai
