Memecoin scams are just getting started

Despite all the foolishness, some corners of the cryptocurrency industry have embraced memecoin fever. In search of huge returns, a small number of hedge funds did just that I invested in memecoins this year. Other investment firms, such as Pantera Capital, consider memes to be a “currency.”Trojan horse“It will potentially introduce new people to cryptocurrencies.

The idea, says Robert Lu, a cryptocurrency analyst at market data firm PitchBook, is that memecoin activity on a given crypto network will translate into a ready audience for future projects with practical utility built on the same underlying infrastructure. “It brings kind of spin-off value to other real projects,” Lu says.

But others say the memecoin phenomenon is likely to harm cryptocurrencies by perpetuating the view that the industry is nothing but a paradise for gamblers and scammers. “At best, it looks like a risky casino. Or a series of false promises hiding the casino. books Eddie Lazarin, CTO of the cryptocurrency division of venture capital firm a16z, in April. “This severely impacts adoption, regulation/codes, and building behavior. I see the damage every day. You should too.”

The irony is that memes have largely escaped the attention of US financial regulators under the Biden administration, while entrepreneurs trying to create meaningful use cases for cryptocurrencies have been wrong. Targeted for investigationChris Dixon, president of cryptocurrency firm a16z, said in an interview with WIRED last year. “The stupidest things about cryptocurrencies, like Dogecoin, that make absolutely no sense and are ridiculous, this is completely legal,” Dixon said.

Khan says there’s a potential future where entrepreneurs could use memecoins as a way to raise capital for serious cryptocurrency projects without giving away equity. But for now, it represents financial speculation at its finest. “We’ve always been in this place where we as an industry are seen as a decentralized version of Macau or Vegas. It doesn’t help us that way,” he says.

Whether or not memecoins hurt the cryptocurrency industry’s prospects or reputation, crackdowns are likely to be taken in some form, industry observers say, as much as the amount of money flying around and the level of risk to which traders are exposed.

“Memecoins is definitely a PvP game. For someone to win, someone has to lose. A lot of people who can’t afford to lose money will be the ones who lose the most,” Khan says. “There has to be a crackdown.” At some point.”

Since memecoins defy easy comparison with traditional investment assets, Lu says, they might be better regulated by gambling authorities. “It’s basically unregulated gambling,” he says. “It will probably come down to the jurisdiction of the gambling regulator in each country,” he says. “Through the grapevine, I’m already hearing some regulators in the US talking about doing some sort of regulation.” Pump declined. .Fun comment.

Until then, memes will continue to do their part. On December 5, Hailey Welsh of Hook Toah fame launched a coin, which is… It lost 95% of its value In the first hours of trading, causing a sensation. On the same day, merchants were throwing money Girls,coin style The celebrity squirrel was euthanized late last year by the New York State Department of Environmental Conservation, currently valued at more than $1 billion.

Since launching MOTHER, Azalea has relentlessly promoted the coin among her 7.7 million followers on Provocative pictures and Mimi Posts. Part of her plan to ensure the longevity of her coin—a rarity in mimos—was to create some sort of utility for it. currency now Accepted as payment Through a start-up telecommunications company in which Azalea owns a stake. “I plan to be here for a long time. And I will be,” she says.

Eventually, Azalea hopes to invest memecoin in other business opportunities — including starting her own investment fund — by demonstrating her ability to identify and navigate the zeitgeist to potential partners and investors.

“I’ve always been the biggest bother,” she says. “I like to bait, troll, and say things that are a little provocative. I like to say things and move in ways that I know can be memorable… It’s about speed, ultimately.”