Key Takeaways
- Memecoins gained mainstream attention in 2024, attracting both legitimate traders and scammers.
- Common scams include coordinated shilling, MEV bot frontrunning, fake partnerships, social profile hacks, celebrity-backed memecoins, and classic rug pulls.
- Some of the red flags to look out for include disproportionate hype, questionable partnerships, unusual token distributions, and more.
- Investors can protect themselves by being cautious of initial hype and researching token contracts and wallet distributions before buying.
Memecoins have turned mainstream in 2024, capturing the attention of seasoned traders and newcomers. From quirky names to meteoric price surges, memecoins are reaching billions of dollars in market capitalization. These cryptocurrencies promise quick profits but are equally prone to scams. In a space where anonymous developers and hyped launches reign supreme, the risks are abundant.
But the good news is, that the more informed you are, the more prepared you’ll be to avoid falling prey to scams. In this article, we’ll explore the most common memecoin scams to watch out for in 2025 and how to protect yourself.
6 Common Memecoin Scams to Avoid in 2025
Memecoin scams come in many forms, each crafted to deceive investors and create illusions of legitimacy. Below are five of the most common tactics and how to spot them.
1. Coordinated Shilling (Crypto Cabals)
Coordinated shilling is a deliberate effort by groups of traders (mostly whales) or bots to flood social media with exaggerated claims about a memecoin’s potential. The goal is to create the illusion of demand, drive up the token’s price, and cash out before reality catches up.
During the 2024 memecoin boom, many projects saw coordinated campaigns on platforms like Twitter, Telegram, and Discord. For example, the CATDOG memecoin was massively pushed by multiple accounts on X, promising traders that it’ll continue to climb the charts. In reality, the insiders were constantly doing massive selloffs to make a profit.
How to spot it:
- Repeated promotional messages from the same few accounts.
- Overenthusiastic claims, often urging urgency.
- Suspiciously high engagement on posts without substantial evidence of project value.
2. MEV Bot Frontrunning
Maximal Extractable Value (MEV) bots, often used by miners or developers, exploit the mempool (where pending transactions are queued) to reorder or insert transactions for profit. In memecoin trading, these bots identify buy orders and purchase the token just before the investor, inflating its price.
For example, you might submit a buy order at $0.01 per token, only to find the token’s price spiking to $0.02 because the MEV bot beat you to it. This type of frontrunning squeezes profits from buyers and can lead to massive losses if the token’s value drops.
How to spot it:
- Sudden price spikes in the token after submitting a transaction.
- Inconsistent slippage settings on exchanges.
- Unusual activity patterns in blockchain explorers.
3. Fake Partnerships and Endorsements
Scammers frequently fake partnerships or claim endorsements from well-known brands, influencers, or celebrities. By creating the illusion of credibility, they lure investors into thinking the project has long-term viability.
During the height of memecoin hype, some developers falsely claimed partnerships with major crypto exchanges or tech companies, enticing buyers to invest in pre-sales. Once they collected enough funds, the scammers would disappear.
How to spot it:
- Verify claims directly with the mentioned partner or brand.
- Look for official announcements on all possible social channels.
- Be cautious of overly polished websites or whitepapers with generic or unverifiable details.
4. Social Profile Hack Scam
Whenever in doubt about a specific you can always check its official channels. While that’s usually the case, it can also be a double-edged sword.
Imagine the following scenario, a project is about to launch its long-anticipated memecoin and announce the contract address on X for the first time. Everyone eagerly awaits the post and it finally happens. Traders rush in to buy the token, only to realize minutes later that the social account was hacked and this wasn’t the real contract.
Consequently, the price dumps, and investors are left with worthless tokens. In most cases, it’s hard to tell whether the team truly got hacked or they’re simply using it as an excuse to dump tokens for profit.
How to avoid it:
- Don’t fall victim to the initial hype and avoid buying too early.
- Verify the legitimacy of the contract first on all possible social channels.
5. Celebrity/Influencer Memecoins
Anyone can create a crypto memecoin and while that’s usually a good thing, some use it for malicious purposes. Instagram influencers and various celebrities have more than once dipped their toes in memecoins. In most cases, the results were catastrophic for their fanbase.
One recent example is the HAWK memecoin created by Hailey Wench also known as the Hawk Tuah girl. Minutes after launch, the coin rose to hundreds of millions in market capitalization, then it quickly dropped, losing over 90% of its value. While the team behind the token claims there was no insider trading, the charts and token distribution prove otherwise.
How to spot it:
- Massive initial hype for the token.
- Wallets holding disproportionate amounts of the token early on.
6. Rug Pulls
Rug pulls are the most notorious memecoin scam. Developers launch a token, build hype around it, and then withdraw liquidity, rendering the token valueless. Many developers would go to great lengths to fake it, including writing a whitepaper, creating a polished website, and more.
In 2024, many memecoins on Solana experienced rug pulls, costing investors millions of dollars. A common red flag was that these projects lacked transparency, often avoiding audits or offering vague information about tokenomics and team members.
How to spot it:
- Lack of transparency regarding team identities or project audits.
- Sudden removal of liquidity from decentralized exchanges.
- Contracts with functions that allow developers to mint unlimited tokens or lock trading.
Closing Thoughts
Memecoins are as exciting as they are risky, offering opportunities for immense gains but also posing a significant risk of scams. By staying informed about common tactics such as coordinated shilling, MEV bot manipulation, and rug pulls, you can better navigate this volatile space.
As 2025 is about to unfold, memecoins will continue to most likely continue to dominate headlines. Remember to always stay vigilant and question every opportunity before diving in.
