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An unknown trader pocketed nearly half a million dollars in profit from a newly launched memecoin shortly before the token lost half its value, fueling insider trading allegations amid a recent wave of memecoin collapses.
The savvy trader made an over 1,500-fold return on his initial investment, turning it into over $482,000 in less than 24 hours on the Bubb (BUBB) memecoin.
βTurned $304 into $482K on $BUBBβa 1,586x return! This trader spent only $304 to buy 43.94M $BUBB and sold 28.9M $BUBB for $122K, leaving 15.64M $BUBB($360K),β wrote Lookonchain in a March 21 X post.
The profitable trade happened shortly before the token shed over 50% of its value, dropping from a peak market capitalization of $43.7 million at 10:00 pm UTC on March 21 to $22.6 million currently, according to Dexscreener data.
The Bubb token started receiving significant investor attention on March 20, after Binance co-founder and chief customer service officer Yi He commented on one of the tokenβs posts β a move that was interpreted by traders as a sign of a potential token listing on the worldβs largest exchange.
The unknown traderβs over 1,500-fold return sparked insider trading allegations among market participants.
βCan you tag these kinds of posts with βinsiderβ so I can mute all of those, i rather be naive about it,β replied pseudonymous crypto investors fhools, to Lookonchainβs X post.
The profitable trade comes a week after Hayden Daviesβ Wolf of Wall Street-inspired memecoin crashed 99%, showing signs of significant insider activity ahead of the tokenβs collapse.
Davis launched the Wolf (WOLF) memecoin on March 8, banking on rumors of Jordan Belfort, known as the Wolf of Wall Street, launching his own token.
The token reached a peak $42 million market cap. However, 82% of the WOLF tokenβs supply was bundled under the same entity, according to a March 15 X post by Bubblemaps.
Related: Crypto debanking is not over until Jan 2026: Caitlin Long
Daviesβ latest token launch comes weeks after the Libra tokenβs collapse, where eight insider wallets cashed out $107 million in liquidity, leading to a $4 billion market cap wipeout within hours.
The Libra token turned into a political issue, with Argentine President Javier Milei risking impeachment after his endorsement of the Libra coin.
Related: Milei-endorsed Libra token was βopen secretβ in memecoin circles β Jupiter
Politically-backed memecoins need stronger investor protection guardrails
To avoid another meltdown similar to Libraβs, tokens with presidential endorsements will need more robust safety and economic mechanisms, such as liquidity locking or making the tokens in the liquidity pool non-sellable for a predetermined period, DWF Labs wrote in a report shared with Cointelegraph.
The report stated that tokens from high-profile leaders also need launch restrictions to limit participation from crypto-sniping bots and large holders or whales.
βLimiting bot and whale activity is essential in limiting the impact of individuals acting on insider information to corner a large percentage of the token supply,β according to Andrei Grachev, managing partner at DWF Labs:
Total trader losses from Libra. Source: DWF Labs
The Libra scandal resulted in 74,698 traders losing a cumulative $286 million worth of capital, according to DWF Labsβ report.
Milei faces impeachment calls from his political opponents after endorsing the cryptocurrency that turned into a $100 million rug pull.
Magazine: Caitlyn Jenner memecoin βmastermindβsβ celebrity price list leaked
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