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WSB meme coin plummets over 90% in 24 hours following exit scam by project team member — time to buy at the bottom?

Andrew Zhoao

News editor

May 4, 2023 at 06:22

WSB, the official memecoin of the popular WallStreetBets subreddit, has dropped more than 90% in the last 24 hours after a member of the project team made what is known as an exit scam when an organization or individual creates a digital asset project, promotes the currency until a monetary threshold is reached, then disappears with their investor victim’s money. This was reported on Twitter by the investigator, ZachXBT. Read more about it all below.

ZJZ move: what happened?

At the center of the story is the WSB Coin project, one of whose members, a certain ZJZ.eth, sold off most of the tokens and disappeared. As part of the transaction, the perpetrator managed to get $636,750 (334 ETH). As a result of such a move, the WSB project’s native token fell by 90%.

ZJZ.eth was reportedly responsible for managing WallStreetBets’ moderation bots. Moreover, according to ZachXBT, he already had to deal with ZJZ.eth in November 2022.

“It’s ironic, nobody even knows who that ash guy is and all the dudes that actually donate all of our time to running /r/wallstreetbets are broke. I guess we should have been greedy amoral bastards instead,” he said.

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It’s also clarified that another OIP mod helped make the transfer. It is assumed that ZJZ.eth used it as a co-signer in a multi-signature wallet, thus automating the transaction.

The attacker is believed to have sold off only 9% of his tokens. Meanwhile, he still has 6,69% (the total supply is 69,420,000,000 WSB). As such, experts have begun to wonder why he hasn’t sold out of all of them. What do you think?

In addition, one of the project team members under the nickname WSBMod tried to contact ZJZ.eth. First, he held a stream for the community members on Twitter Space, and later he tried to attract the attention of ZJZ.eth directly on the social network.

“If you don’t get in touch with me within four hours, I will file a police and FBI report. You are fully doxxed. I don’t understand why you would do this. If somehow there’s an explanation, you have to speak up but I don’t know how that’s possible. You can still return the money,” WSBMod stated.

How did this affect the cost of WSB?

After this event, the native coin of the WSB project went down by 94,31%, from $0.0005258 to $0.0000299, and it keeps going down.

WSB Coin to USD chart
WSB Coin to USD chart

Judging by the chart on CoinMarketCap, the launch of the token took place on May 2. The asset started at $0.0002758 and managed to jump to $0.0006912 (+60,1%) and stay at this level. However, the token has now reached its first historical all-time low. Thus, it turns out that those who put in the project at the start now have 9,2 times less of the invested amount.

At the same time, the trading volume of the asset has also increased. During the last day, the indicator grew by 182,86%, which may indicate that users are trying to save their funds. This can be done on two exchanges, Uniswap and OpenOcean, where tokens are traded in pairs with ETH and WETH.

As for buying a token, it may seem like a good time to buy at the bottom so that when the asset rises in value again, you can make a profit. However, some users believe that now is not the best time to do this because the price may not recover. Generally, though, do your own research first.

Trader and creator of the analytical tool Moralis Siegfried, among others, warned that the project is rapidly losing its liquidity, and several whales have already sold their coins.

“Don’t buy this. Too dangerous,” he said.

Will the money be returned? ZJZ comment

At the time of this writing, ZJZ.eth had gotten in touch and tried to justify his actions. In particular, his thought was that he himself was cheated and that the native token was periodically secretly merged by huge amounts (~$25K).

In addition, according to him, WSB Coin was designed to enrich the aforementioned WSBmod, in connection with which ZJZ.eth apologized for not noticing it immediately and allegedly seeking to return the funds back to their holders.

But it is not yet clear whether he will do it or not. However, there is reason to believe that ZJZ.eth is already busy with other things. A user under the nickname Deploydon stated this under one of the posts about the news. So, according to him, ZJZ.eth has already launched another coin called ZJZ, which disappears from the balances of those who bought it.

Whether ZJZ.eth will return the funds or not is still unclear. We will follow the details of this story.

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Home » Insights and analysis » WSB meme coin plummets over 90% in 24 hours following exit scam by project team member — time to buy at the bottom?

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