Author: Yuliya, PANews
Since Trump's coin launch on January 18, the zero-threshold coin issuance mechanism of Pump.Fun has gradually exposed its dual nature: on the one hand, it injects liquidity into the market, and on the other hand, it also provides a breeding ground for black and gray industries. The hidden dangers brought by this mechanism are becoming greater and greater, and of course, it also provides hackers with more lucrative wealth opportunities. (Misappropriating social accounts, giving out a CA) Congratulations to you who did not delve into the project behind it, you have successfully boarded the car.
On February 15, Argentine President Milei's high-profile support for the LIBRA token on social media pushed the project, whose market value had once soared to $4 billion, to its peak. However, after Milei suddenly deleted the tweet and issued a clarification statement, the LIBRA token experienced a cliff-like plunge, with the lowest market value shrinking to $130 million, a 96% evaporation from the peak. According to insiders, there were reports a week before the token was issued that someone had bribed $5 million to high-level officials around President Milei in exchange for Milei's public support. This twist has caused the market's enthusiasm for meme coins to plummet sharply, and the year-long Pump.Fun craze is waning. The platform's protocol fees have plummeted 84.57% from the historical peak of 72,506 SOL on January 1, and now the daily revenue is only 11,188 SOL.
Unexpected Anger of Top White Hat Hackers
When the KIP Protocol proudly announced the launch of the "Viva la Libertad" project and boasted of the success of the $LIBRA token, it claimed that the project was led by a private enterprise and had nothing to do with Argentine President Milei, but this statement was quickly refuted.
Chaofan Shou, the co-founder of Fuzzland, began to bombard the KIP Protocol, directly shouting "RNM, return the money!" He lamented that he and Solayer engineer @tonykebot had lost more than $2 million in the LIBRA project, and exposed the list of core members of the KIP Protocol team behind LIBRA, claiming "let's see what two hackers and an idle weekend can bring us", hinting that he would take action. (It is reported that Shou enjoys a high reputation in the field of network security, and his team has successfully recovered more than $33 million in stolen funds, and the bug bounty in the Web2 security field exceeds $1.9 million.)
In the following days, Shou and KIP Protocol co-founder Julian engaged in an online "tearing" on Twitter, with Julian saying "if the project really rug pulled, then come find me, your loss of money is your own problem, not because the project rug pulled". In response, Shou issued a stern warning that he would track down the responsible parties, "from Vietnam to Singapore to the United States, none of them can escape." Immediately, Shou exposed Julian's personal identity information and directly said "whether you return the money or not, running away is still running away." He warned that "a $200 million case in the United States could face up to 50 years in prison, so I advise you to go back to Singapore as soon as possible." Although the act of running away is truly despicable, the editor believes that the practice of leaking someone's identity before the outcome is known is indeed inappropriate.
Unveiling the True Face of the Project Team
After the market chaos, multiple Solana ecosystem projects have stated "it has nothing to do with me", distancing themselves from LIBRA. Meteora co-founder Ben Chow said he had never purchased, received or managed any LIBRA tokens; Jupiter co-founder Siong also said he had not colluded with projects like $LIBRA and $ENRON.
Blockchain analysis company Bubblemaps' investigation shows that LIBRA is closely related to the previously controversial MELANIA token project. The early target wallets of the two projects are highly overlapping, and they both use similar "pump and dump" tactics.
- Utilizing cross-chain protocols (CCTP) to transfer funds across different blockchains
- Conducting "front-running trades" through multiple associated wallets
- Extracting about $87 million from liquidity pools
In an interview with YouTube blogger Coffeezilla, Hayden Davis admitted that the team conducted target trades when launching both the LIBRA and MELANIA projects, but emphasized that the original intention was to protect project liquidity, not to profit from it. The core members of the LIBRA project include:
- Hayden Davis (founder of Kelsier Ventures)
- Julian Peh (founder of KIP Protocol)
- Mauricio Novelli (Argentine Technology Forum)
- Manuel Godoy (Argentine Technology Forum)
Hayden said the LIBRA token issuance was not a "mowing the lawn" scheme, but rather a market collapse due to the failure of the plan. He currently holds $100 million in funds and is seeking a solution. He revealed that target trading has become a common phenomenon in the meme coin field, and the token issuance stage of most projects will be exploited by insiders or high-frequency traders.
Reflection on the Incident
The chain reaction triggered by the incident continues to ferment:
- Market level: Bitcoin's market share has risen to a four-year high of 60%, and QCP Capital analysis points out that the "rug pull" scandal of the LIBRA project may long suppress the altcoin and meme coin market;
- Judicial level: Currently, the Argentine government has set up a cross-departmental investigation team, jointly investigating with financial regulators and anti-money laundering agencies. Former central bank governors and others have filed lawsuits, accusing Milei of playing a key role in the project and involving fraud;
- Industry reflection: Three Arrows Capital co-founder Zhu Su believes that the main mistake of the Libra team was to withdraw from the Meteora liquidity pool and engage in short-term arbitrage, otherwise it would have operated like the TRUMP token.
This cryptocurrency drama that combines political endorsement, hacker confrontation, and capital manipulation has exposed three major realistic dilemmas in the Web3 world:
- Government endorsement does not equate to project credibility
- Insider trading and market manipulation are still widespread in the cryptocurrency market
- Community self-governance power, especially the participation of technical experts, may be more effective than traditional regulation
