The crypto world is witnessing a surge in fraudulent activities, as fake TRUMP and MELANIA tokens rake in a staggering $4.8 million in trading volume within just 24 hours. These tokens, masquerading as official projects, have captivated investors but pose significant risks.
Fake Tokens Flood the Market
On January 20, opportunistic traders launched hundreds of counterfeit tokens on the Solana blockchain, mimicking the official TRUMP and MELANIA tokens. Reports reveal that 61 of these tokens used names containing “TRUMP” or “MELANIA,” creating the illusion of legitimacy.
According to blockchain security firm Blockaid, the number of malicious tokens surged to over 6,800 on the day the official TRUMP token was released, doubling the daily average of 3,300 new tokens. These fraudulent projects attracted funds from 12,641 unique wallets, signaling widespread deception.
Liquidity and Value Manipulation
The fraudulent tokens’ creators employed tactics like artificially inflating trading volumes to lure investors. Ian Orwick, co-founder of Quai Network, highlighted the dangers: “Many of these projects lack liquidity and intrinsic value, leaving investors vulnerable.”
Analysis shows that out of 61 examined tokens, only nine had liquidity exceeding $10,000. Alarmingly, liquidity pools for six of these tokens were entirely drained within a day, leaving investors with substantial losses.
MELANIA Tokens Under Scrutiny
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The fake MELANIA tokens followed a similar trajectory, with 23 counterfeit projects surfacing on Solana. Only four managed to surpass $10,000 in liquidity, and one of these was wiped out within 24 hours. The remaining tokens are heavily controlled by large investors, exposing smaller participants to price manipulation.
Expert Warnings
Mads Eberhardt, Senior Crypto Analyst at Steno Research, warned that fraudulent projects often manipulate their market caps and circulating supply to appear credible. He stated, “These tokens rely on inflated data to feign legitimacy and attract unsuspecting investors.”
Official TRUMP Token’s Market Performance
The official TRUMP token, launched on January 17, gained rapid traction, reaching a fully diluted valuation (FDV) of $71 billion. However, its value declined to $40 billion following Donald Trump’s inauguration. Critics argue that the association with meme coins damages the crypto sector’s credibility and fosters conflict of interest concerns.
Investor Caution is Key
As fraudulent projects continue to target novice investors, experts urge caution. Verifying a token’s legitimacy and conducting thorough research are essential to avoid falling victim to scams.
The Bit Journal will keep monitoring this story as it develops, providing readers with insights into the evolving crypto landscape.
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