An insider trader has managed to turn just 0.34 ETH tokens, worth $878, into around $550,000 in just a couple of hours after trading a newly launched memecoin, with data from the blockchain suggesting the trader is the developer behind it.
According to on-chain analysis service Lookonchain, the trader spent the 0.34 ETH tokens to buy 80 million $FERRET tokens, which were spread across five different wallets. The tokens were bought just as $FERRET opened for trading.
The trader then sold 11.8 million $FERRET tokens for 21 ETH, worth around $54,000, and is still holding onto 68.2 million FERRET, worth nearly $500,000. Both the insider and the deployer behind the cryptocurrency seemingly used the same wallet address to transfer tokens to, suggesting that the insider is the deployer.
Cryptocurrency insiders trading on privileged information has been becoming increasingly common over the last few months. This is especially true for memecoins, which are created and traded without any oversight or transparency for regular investors.
This has prompted regulators like U.S. Securities and Exchange Commission Chair Gary Gensler to warn repeatedly about the “serious risks” of cryptocurrency trading as some retail investors chase volatile and illiquid cryptocurrencies in a bid to get rich quick.
Other traders take advantage of influential figures’ moves to trade. As reported, a cryptocurrency trader has managed to turn $10,000 into a $1 million stash in just 10 days, taking advantage of a small change in the profile of X CEO Elon Musk, who wrote “(CTO) Chief Troll Officer) on his profile.
The trader, seeing the move, withdrew 4.313 ETH tokens from leading cryptocurrency exchange Binance, worth around $10,100, and spent 4.3 ETH to buy 19.37 tokens of the $TROLL cryptocurrency.
The trader later on sold 9.37 trillion tokens for 5.318 ETH, worth around $12,400, to get a return on their investment, and is now still holding onto 10 trillion tokens worth over $1 million.
Featured image via Unsplash.
