We regularly remind you to be cautious when it comes to investing in cryptocurrencies, even if they are recommended by your favorite UFC fighters.
Khamzat Chimaev is accused of participating in a “cryptocurrency rug pull” after encouraging his followers to buy a new Solana-based meme coin called “Smash.” “Bolz” promoted Smash across multiple social media networks, driving the value of the token up to 0.01 SOL, or $1.35 in old-time U.S. dollars.
What happened next will shock you.
Less than 24 hours after Chimaev’s big push, a massive sell-off occurred, causing SMASH to drop in value by over 91% to 0.004 SOL ($0.53) per token. While high volatility for the meme coin is nothing new, those investigating the coin’s blockchain are now accusing Khamzat of orchestrating a pump-and-dump.
Prominent crypto researcher ZachXBT explained:
“Yesterday, Khamzat Chimaev and his associates released a cryptocurrency called Smash and made several videos promoting it to their followers,” he said. “And within 24 hours, he stole the coins and $1 million from fans who invested in the coin.”
“And of course, this genius’ honest team and himself were quickly exposed and people were able to trace the scam back to himself, tracing it back to the exact wallet address he used. Khamzat quickly deleted all the videos he made to promote the scam shortly after being exposed.”
“It’s sad to see someone who was on the verge of being a superstar turn into a money maker by scamming his fans,” ZachXBT concluded, “because he probably only got a fraction of the money that was stolen.”
It’s important to note here that we’re not forensic crypto analysts and can’t definitively confirm or deny ZachXBT’s claims, but in his Twitter post he lists specific blockchain transactions that indicate this was an insider fraud.
Khamzat, your team is incompetent because you have directly linked your team’s wallets to the wallets of insiders who have purchased over 78% of the supply.
Why would you guys ruin your reputation in an instant with a meme coin scam?
summary:
Using timing analysis, we determined that 71% of insider and development team wallets were… pic.twitter.com/0mVYvAofYE
— Zach XBT (@zachxbt) July 4, 2024
according to Cointelegraph, “At least 71% [Smash] The supply will likely be linked directly to an insider wallet funded by the same Ethereum address that funded the Smash token developer address on Solana.”
In other words, the same organization that created Smash also bought a large portion of the Smash tokens (an estimated $712 million). Khamzat then promoted the coins, causing them to rise in value. A subsequent dumping occurred, allowing whoever was behind this to walk away with roughly $1 million, according to ZachXBT’s estimates.
It’s not a lot of money in the crypto world, but it’s not bad for 24 hours of work, and the only thing it cost was Khamzat Chimaev’s reputation.
