Investors lost over $500 million to meme coin scams in 2024 alone, with the trend continuing into 2025 through larger, more sophisticated schemes often tied to celebrities and political figures, according to reports from blockchain analytics firm Merkle Science. The ease of token creation on platforms like Solana has exacerbated the problem, leading to a surge in 'rug pulls' and 'pump-and-dump' scams that target both novice and experienced investors.
High-profile cases illustrate the scale of losses. In February 2025, the $LIBRA memecoin, linked to Argentine President Javier Milei, collapsed after reaching a market cap of $4.6 billion, resulting in approximately $250 million in investor losses amid fraud investigations. Similarly, the $HAWK coin, promoted by influencer Haliey Welch in late 2024, soared to a $500 million valuation before plummeting over 90% within hours. Another Solana-based token, M3M3, faced a lawsuit after insiders allegedly controlled 95% of the supply, orchestrating a dump that caused over $69 million in damages.
"Meme coins derive most of their value from social media buzz and viral trends, making them highly susceptible to manipulation," the report notes. Common scams include classic rug pulls, where developers drain liquidity pools; pump-and-dumps coordinated by insiders; and phishing schemes using compromised celebrity social media accounts. So-called 'soft' rug pulls, enabled by smart contract backdoors or excessive insider allocations, are also prevalent.
Key red flags for investors include anonymous development teams, concentrated token ownership (where top wallets hold over 20% of supply), unverified celebrity endorsements, unlocked liquidity pools, unaudited smart contracts, and aggressive marketing using urgency tactics. To mitigate risks, experts recommend using blockchain explorers like Etherscan or Solscan to verify contract details, employing risk assessment tools like Rugcheck and GoPlus, storing assets in hardware wallets, and regularly revoking unnecessary token approvals via services like Revoke.Cash.
The article concludes that while meme coins can offer high returns, they carry significant risk. Investor protection hinges on rigorous due diligence, skepticism towards hype, and a focus on risk management over trend-chasing.
