BabyMuskCoin turns out to be the latest case of rug pulling among the newly created meme coins, with more than $600,000 taken off from the investors. After the huge upsurge witnessed in the fame of Dogecoin – caused by Elon Musk (included in the most influential persons across the globe) – the industry of cryptocurrency has witnessed a swift growth in the meme coins’ number. Though some of them remained successful, with Shiba Inu being at the top of them, the rest of them were blatant frauds.
The rug pull of BabyMUSKCoin
The latest instance in such cases is the meme token with the name of Tesla’s CEO Elon Musk (counted among the richest persons in the world). BabyMuskCoin was the crypto meme token aiming to grasp the attention of the person it is named after so that he would be a part of the project. Nevertheless, the value of the token plummeted by nearly 99% in a matter of hours because the anonymous group at the back of the project transferred up to 1,571 BNB (almost $660,000) to the prominent mixer called Tornado Cash.
As elaborated by CertiK, the group first asserted being swindled over Telegram, nonetheless, the website and the Twitter account of the project went down with no activity afterward. In another statement, on 31st January, the developers reportedly performed a couple of transactions of 10 BNB to Tornado Cash. After that, they began exchanging BabyMUSK with BNB before causing the value to plunge by 99%. The BNB tokens were transacted to some outside address and then to Tornado Cash.
Rug pulls and their prevention
As shown by the title, these wicked operations signify that the developers/creators of a particular project choose to pull the project’s rug via grabbing the entirety of the tokens in their possession and quit the protocol. Several cases of this kind have been witnessed in the recent month, and even then, the investors are continuously depositing their funds into the doubtful projects.
In this scenario, Rongui Gu (the co-founder of CertiK and an assistant professor under Columbia University) stated that rug pulls were in abundance throughout the previous year and just in January almost $16.56M in funds was lost due to nine rug pulls, along with other seven rug pulls solely from IDOs.
He recommended that every line of smart contracts should be keenly observed by professionals to avoid security hazards. According to him, secure coding should be implemented by the Dev groups to prevent exploitation.