Solana is one of the ecosystems where memecoins are the most popular. Thus, the Pump.fun platform allows you to launch memecoins in just a few clicks. Unfortunately, this opens the door to a lot of abuse.
- The FOCAI memecoin, launched on Solana, experienced an extraordinary rise in price, reaching a peak of $46 million in capitalization before collapsing.
- An investigation revealed disturbing insider trading practices involving 15 addresses, which made colossal profits using inside information.
FOCAI: the memecoin of the day on Solana
On December 12, the token FOCAI was launched on the Pump.fun platform. This token quickly attracted the attention of memecoin traders and saw its price explode.
Indeed, the token was launched with a price of $0.00000001 and reached a peak at $0.0013. This represents an increase of more than 1 million percent.
For its part, the capitalization of the token reached a peak at $46 million a few hours after the launch.
However, as with the majority of memecoins, the hype was short-lived. Indeed, since its peak, the token has today lost more than 90% of its value.
Unfortunately, as we will see, this token has not only attracted traders, but also scammers.
FOCAI: a memecoin that looks like insider trading
On December 12, analysts at Lookonchain shared a troubling discovery regarding the FOCAI token.
Thus, they identified no less than 15 addresses that appear to be involved in insider trading.
In fact, these 15 addresses have purchased 60.5% of the total supply of the token for a total of $14,600. Subsequently, they resold their tokens for a total of $20.5 million. As a result, these 15 addresses made a profit of $20.48 million.
For example, one of the addresses purchased 123 million FOCAI tokens for 5.39 SOL, or approximately $1,168. She later resold her tokens for 16,070 SOL, or approximately $3.47 million. So, this address made a profit of x2973.
It appears that these addresses were created shortly before the launch of the token. This suggests that they belong to people who knew about the launch before anyone else. Worse yet, these could be addresses belonging to the token creator.
Regardless, it is obvious that these addresses took advantage of privileged information to make colossal profits.
Unfortunately, this kind of practice is commonplace in the crypto ecosystem. Indeed, last July, a Coinbase employee was found guilty of using inside information to carry out trades.
