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Investigation Reveals Memecoin Creators Behind Influencer Account Hack

ByDayne Lee

May 28, 2024

Investigation Reveals Memecoin Creators Behind Influencer Account Hack

A new investigation has unearthed a connection between a recent memecoin launch and the hacking of a prominent cryptocurrency influencer’s social media account. Pseudonymous investigator ZachXBT has linked the creators of the Solana-based memecoin CAT to a sophisticated scheme that compromised the X account of well-known crypto influencer Gigantic-Cassocked-Rebirth (GCR).

The Hack and Its Execution

On May 26, GCR’s X account was hacked to manipulate the price of specific cryptocurrencies. This incident coincided with suspicious activities surrounding the CAT memecoin, launched just two days prior by the Sol team. The hackers managed to control over 63% of CAT’s total supply, subsequently selling off $5 million worth of the token. The profits were dispersed across several wallets and parts of these funds were moved to the trading platform Hyperliquid.

Trading Manipulation Details

Just before the hack, the attackers strategically placed long positions in ORDI and (ETHFI), anticipating a rise in their market prices. Using GCR’s hacked account, they then promoted ORDI, leading to a temporary price spike and a profit of approximately $34,000. However, their attempt to manipulate the ETHFI market failed, resulting in a loss of $3,500, leading them to close the position.

  • ORDI: Long position of $2.3 million opened, resulted in a $34,000 profit.
  • ETHFI: $1 million long position led to a $3,500 loss.

ZachXBT criticized the scammers for their poor execution and questioned the community’s support for influencers promoting risky meme coin investments. His analysis indicated that a SIM swapping attack facilitated the breach, a tactic where scammers convince a mobile carrier to transfer a victim’s phone number to a new SIM card they control.

Memecoins as a Vector for Scams

The crypto community has seen an increasing use of memecoins for fraudulent schemes. Typical strategies involve hyping a memecoin to drive up its price before the creators sell off their holdings at a high, often followed by a sudden withdrawal of all funds from the project’s liquidity pool, leaving other investors at a loss.

In response to the rising number of such incidents, experts recommend:

  • Vigilance: Crypto users should exercise caution when following investment tips from social media.
  • Security Measures: Utilizing tools like RevokeCash to regularly check and revoke unauthorized wallet permissions can prevent such exploits.
  • Awareness: Education on the signs of manipulation and understanding the tactics used by scammers can help prevent falling victim to similar attacks.

The incident sheds light on the vulnerabilities within the crypto space, particularly concerning influencer-led promotions and the unstable nature of meme investments. It serves as a crucial reminder of the need for heightened security measures and regulatory scrutiny to protect investors from sophisticated cyber-attacks and market manipulations.

Featured image credit: GuerrillaBuzz via Unsplash

Dayne Lee

With a foundation in financial day trading, I transitioned to my current role as an editor, where I prioritize accuracy and reader engagement in our content. I excel in collaborating with writers to ensure top-quality news coverage. This shift from finance to journalism has been both challenging and rewarding, driving my commitment to editorial excellence.

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