TLDR
- Over $500 million was lost to memecoin scams and rug pulls throughout 2024, with hackers primarily using social engineering tactics
- Scammers targeted celebrity social media accounts, including Kylian Mbappe and Wiz Khalifa, to promote fake tokens
- X (formerly Twitter) was the main platform for attacks, accounting for 75% of all incidents, while YouTube saw 19%
- The Mbappe scam resulted in a fake token reaching $460 million market cap before collapsing
- Social engineering led to equal amounts of rug pulls and phishing attacks, each representing 44% of total scams
A new report from crypto intelligence platform Merkle Science has revealed that investors lost more than $500 million to memecoin scams and rug pulls during 2024, with hackers primarily exploiting compromised celebrity social media accounts to carry out their schemes.
The research shows that social engineering emerged as the preferred method for crypto fraudsters, who focused their efforts on gaining unauthorized access to high-profile social media accounts. These accounts were then used to promote fake cryptocurrency tokens to millions of followers.
One of the largest scams involved French soccer star Kylian Mbappe’s X account. After gaining control of his profile, hackers promoted a fraudulent memecoin that quickly reached a market cap of $460 million before its value plummeted to zero in a classic rug pull scenario.
In another high-profile case, music artist Wiz Khalifa’s X account, with its 35.7 million followers, became a target. Scammers used his compromised account to promote a fake WIZ token, which reached a market value of $3.4 million before completely collapsing.
The data shows that social media platform X, formerly known as Twitter, served as the primary battleground for these crypto scams, hosting 75% of all reported attacks. YouTube ranked second, accounting for 19% of the incidents.
Robert Whitaker, director of law enforcement affairs at Merkle Science, explained that these attacks demonstrated a high level of coordination.
“Hackers are no longer just breaching wallets or exchanges; they’re hijacking the credibility of celebrities and industry leaders to manipulate markets in real time,” he told CoinDesk.
The report’s findings indicate that rug pulls and phishing attacks were equally common, with each type making up 44% of the total reported scams. This suggests that criminals are using diverse tactics to defraud investors.
The sophistication of these attacks marks a shift from previous crypto scams. Instead of relying on anonymous accounts or fake websites, criminals are now leveraging the trust and reach associated with verified celebrity profiles.
The success of these scams often relied on the rapid spread of information across social media platforms, with many investors rushing to buy tokens before performing proper due diligence.
The Mbappe incident proved particularly costly for investors. The fake token’s market cap growth to $460 million happened within hours of the initial promotion, demonstrating how quickly these scams can escalate.
The Wiz Khalifa incident followed a similar pattern, though on a smaller scale. The fake WIZ token attracted millions in investment before its value disappeared, leaving investors with worthless digital assets.
The prevalence of these attacks on X suggests that the platform’s large user base and real-time nature make it an attractive target for crypto scammers. The high percentage of incidents on the platform indicates that crypto investors may need to exercise extra caution when encountering token promotions on this specific network.
YouTube’s 19% share of attacks represents another challenge for investors and platform operators alike. Video content has proven effective in convincing potential victims to participate in fraudulent schemes.
The equal distribution between rug pulls and phishing attacks (44% each) shows that criminals are adapting their techniques based on opportunity. Rug pulls capitalize on quick gains through market manipulation, while phishing attempts focus on stealing personal information or crypto wallet credentials.
Law enforcement agencies and crypto security firms continue to track these incidents, but the fast-paced nature of social media and crypto markets often allows scammers to execute their plans before preventive measures can be implemented.
The Merkle Science report reveals that most victims lost their funds within hours or even minutes of a scam’s launch, highlighting the speed at which these operations unfold.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
