Most of us are familiar with an investment going sour in some way, shape or form. Be it bad news about a stock in your portfolio causing the price to tank, a CEO leaving the company and causing a sell-off due to investor doubt, or simply a company going bankrupt and the value of the investment following suit. In the world of cryptocurrency, the worst words to hear in regards to your investment are “rug pull”. This term describes the worst of investment news and is the epitome of investor fears. A “rug pull” is when the company behind the cryptocurrency project takes the money and runs, leaving investors with a worthless investment and potentially years worth of regret to go along with it.
As reported by Decrypt, the BALD token, recently launched on Coinbase’s layer-2 blockchain “Base”, has experienced what appears to be a rug pull.
Only a day after an influx of activity on its eagerly awaited Ethereum layer-2 network, and it appears scammers used the freshly minted BALD token to exploit Coinbase’s newest product, Base.
Base is a layer-2 blockchain by Coinbase that they anticipate will be a new ecosystem for crypto projects.
The BALD token gained 289,000% within the first 14 hours of trading.
Traders rushed to buy into the project on decentralized exchange LeetSwap, but within a day's time, it appears BALD was a rug pull. This was the sentiment after the token’s deployer removed $25.6 million in liquidity.
On July 31st, Twitter (“X”) users began reporting that the token’s deployer account had removed 1,034 ETH in liquidity, causing its price to fall to nearly zero.
Rug pulls are commonly experienced in the crypto world, especially in the realm of decentralized finance (DeFi). They occur when a developer launches a new token and gives the impression that the project is legitimate, but then removes the liquidity and vanishes.
BALD, a meme coin making fun of Coinbase CEO Brian Armstrong’s lack of hair, plunged in value by 92%, according to CoinGecko data.
The Onchain Intrigue Telegram Channel tracked the wallet after pulling liquidity.
It revealed that the wallet went on to buy more Bald to add some liquidity, sent a bizarre tweet seemingly tricking more users to buy the token, and then removed all the liquidity again.
In another Twitter post, the BALD developer refuted allegations of selling tokens, stating, “I didn’t sell a single token at any point since deployment. Just added/removed 2 sided liquidity and bought.” In response, another Twitter user contended that adding two-sided liquidity is, in fact, selling tokens, to which the BALD developer replied, “correct.”
Crypto Twitter user @notEezzy highlighted the activity of BALD token deployer on July 31st, pointing to the suspicious and puzzling activity.
According to Decrypt, Matt Aaron, project lead at Cielo, which runs Onchain Intrigue, told Decrypt that the situation was “puzzling” because the wallet moving the funds was a “sophisticated whale” holding large amounts of cbETH, Coinbase's Ethereum liquid staking token. Liquid staking tokens can be bought, sold, and swapped for other assets. The cbETH can also be redeemed for the Ethereum that was staked to mint it.
“Allegedly this same wallet has KYC’d [know-your-customer] their wallet on a centralized exchange,” he said.
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