The class of meme coins and moonshots has been a wild west of sorts, even in the already wild world of cryptocurrency. Jumping into unregulated digital money is a risky idea for investors. But putting huge sums of money into microscopic, hyper-volatile tokens with no utility? That’s especially risky. As investors are learning today in the case of the Fairmoon (CCC:FAIR-USD) crypto, it hurts when you get burned.
So what do you need to know?
Fairmoon marketed itself as a “fair community crypto.” According to its founders, the purpose of the FAIR crypto was to take a stand against scammers and rug-pull schemes. In fact, it brought a prominent crypto influencer, War on Rugs, in as an auditor. War on Rugs, an account for exposing rug-pull schemes, took over leadership duties for Fairmoon.
Yesterday, Fairmoon announced it would finally be conducting its long-promised 10% supply token burn. But the burn did not happen.
Rather, it seems War on Rugs had taken it upon themselves to conduct their own scam.
Fairmoon (FAIR) Crypto Tanks After Rug-Pull Scam
Yesterday night, someone sold off thousands of Binance (CCC:BNB-USD) from the FAIR token’s liquidity pool, tanking the value of FAIR while allowing the scammer to run off with the profits. Fairmoon itself has announced that this scammer was Shappy, the former leader of War on Rugs, although that is not immediately clear from tracked transactions. War on Rugs then deleted their Twitter account. The irony is palpable: an “anti-rug” influencer pulling the rug on a hyper-volatile token before disappearing.
The Fairmoon websites are both down. The only evidence of the crypto is its BSCScan, which chronicles the frantic transactions that transpired yesterday as investors saw prices drop by 96%, and its Twitter account, which posted an all-caps tweet pinning War on Rugs as a traitor to the community.
SHAPPY, EX LEADER OF WOR, HAS BETRAYED FAIRMOON AND RETH AND SCAMMED BOTH THE FAIRMOON AND WOR COMMUNITIES
WE HAVE WORKED SO HARD TO MAKE A DIFFERENCE AND CULTIVATE A STRONG COMMUNITY, AND HE BETRAYED US.
WE ARE DEEPLY SORRY FOR THE LOSSES WE ARE ALL EXPERIENCING RIGHT NOW
— FAIRMOON🌒 (@fairmooncoin) May 19, 2021
The ironic rug-pull scam is just another story chronicling a deeper issue with crypto investing. It’s all too easy to lift the code from a previous token and rebrand it as your own, complete with ownership and full control over supply and liquidity.
When investors pile into these “moonshot” tokens hoping to get a big bag out of it, they’re putting a ton of faith into somebody who simply may be a bad actor. As the Fairmoon rug pull highlights, it’s always important to do your own research before investing.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.