Trader burns $340,000 in one minute with TrumpCoin

An investor in memecoins had to learn the hard way. The trader lost more than US$340,000 in one minute. How could this mistake happen?

On June 18, a trader supposedly tried to exchange 2,500 SOL (about $342,000) for the newly launched TrumpCoin (DJT) via a trading bot. Instead of the DJT tokens he expected, he received 92,000 DJT tokens, created by fraudsters, that were worth significantly less.

The transaction took place through a "fake" liquidity pool on Raydium, which had insufficient capital and contained DJT tokens created by fraudsters. When the trader exchanged his tokens back to Solana, he realized the mistake. His initial 2,500 SOL had been reduced to less than 5 SOL, representing a loss of more than $340,000. He received only $673 for the DJT tokens.

In the DeFi space, fraudsters regularly set up "fake liquidity pools" to profit from careless mistakes made by traders. Some decentralized exchanges (DEXs) warn their users about such scams, but trading bots usually do not. Especially with newly launched coins, the chances are high that traders will accidentally trade the wrong coins.

This incident is a good example of the dangers crypto investors can face, in addition to price volatility. "Life goes on," writes the trader in question on X (formerly Twitter).

Yet things can be different, as several memecoin traders have shown in the past. One became a millionaire in just five hours, while another realized a profit of $9.5 million in 10 days thanks to the celebrity token MOTHER by American rapper Iggy Azalea.