The memecoin project is facing claims of rug pull following the disappearance of its X account and a sharp drop in the token’s value.
Avalanche-based memecoin project Sender is suspected of being a rug pull following the disappearance of its X account used to raise funds and the drastic 70% decline in its value.
Rug pull is a type of crypto scam that occurs when a project is hyped to attract investors, only for the malicious creators to suddenly disappear with the funds, leaving investors with a worthless asset. In many cases, the bad players create an exit backdoor through which stolen funds can be easily and quickly moved and most of these projects are often relatively new.
Details of the Alleged Scam
Sender is a memecoin project on the Avalanche network. The project raised around 93,000 AVAX worth about $5.3 million. However, the liquidity pool only accounted for 20,000 after the token’s launch while the remaining 73,000 AVAX were transferred to three addresses.
Following this discrepancy between the funds raised and those allocated to the liquidity pool, investors and stakeholders questioned the integrity and transparency of the project alleging mismanagement and unaccounted funds.
The disappearance of the project’s original fundraising X account, 4msener further fueled speculation and distrust among investors who are already questioning the project’s credibility and reliability. With funds seemingly unaccounted for and no clear explanation provided by the project team, concerns regarding potential rug pull intensified. The coin also had a drastic 70% decline in value.
The sharp decline in Sender’s value underscores the inherent risks associated with investing in meme projects and the importance of conducting due diligence before participating in any fundraising or investment opportunities within the cryptocurrency space.
A Guide Against Rug Pull
Although cryptocurrencies have given people the opportunity to gain financial liberation, it does not mean that it is free of malpractice and fraudulent behavior. It would be unwise to buy into any project that surfaces without researching it.
Therefore, crypto investors are urged to exercise caution and vigilance when engaging with similar fundraising initiatives. There is also a need to conduct due diligence before purchasing any coin, as what may seem lucrative could be waiting for the perfect opportunity to pull a scam.
In a similar development, Coinfomania reported last year that the developers behind a memecoin crypto project called Safereum pulled the rug and vanished with investors’ funds worth over $1 million in ETH.
