Ryan has been self-employed for 15 years. He works long hours, on two small manufacturing businesses. But he finds time to daydream about getting in early on a cryptocurrency that goes to the moon.
In 2021, the price of Dogecoin, a crypto token started as a joke, increased 70-fold in the span of four months. The total value of the coins in circulation reached $70 billion. “Imagine being one of the early adopters of Dogecoin,” says Ryan.
The Dogecoin format has been riffed upon by hundreds of copycat memecoins. They serve no purpose and promise no innovation, yet a few have charted a similarly precipitous rise in price. Ryan, who asked to be identified by first name only so he could speak about financial matters, invests in new memecoins as a form of “entertainment,” he says, careful never to spend more than he can afford to lose. But he’s in it for a shot at riches, too.
The market for memecoins—predicated on the idea that anyone can become wealthy, if only they are quick enough off the mark—has created a window of opportunity for scam artists. The scams come in different flavors, but lately, playing on the desire among investors to get in before the crowd, scammers have taken to advertising early-bird rates for those that buy in before a token is released.
The number of meme token presales increased five-fold between February and March, when the price of bitcoin surged to record heights, data provided by crypto security company Blockaid shows. A third of the 369 presales in March alone were identified as scams by Blockaid. “Scammers try to feed on the FOMO,” says Blockaid cofounder Ido Ben-Natan.
Earlier this year, Ryan was casting about for a new investment. He put $750 into the presale of a token named Rebel Satoshi. The website was dressed with charming artwork, investors could pay by credit card, and an apparent press release about it had appeared on Yahoo! Finance, all of which gave him confidence in the token’s legitimacy, at least at first. “It wasn’t long before I started having doubts,” says Ryan.
Before the token was set to be released, claims Ryan, the developers behind Rebel Satoshi changed the rules. While investors were first promised their full allocation prior to launch, it would now be meted out in increments every Monday over a period of eight weeks. Each of those transactions had an associated fee, which could now cumulatively exceed the total value of a small investor’s stake. Ryan speculates that the developers had sold more tokens in the presale than they intended to issue, and were therefore trying to prevent some people from claiming their share. He began to investigate.
Within days of the Rebel Satoshi’s March launch, its price had collapsed by 65 percent. The Rebel Satoshi social accounts began to advertise a different token, now available for early purchase. Investors started to speculate the whole thing might be a scam. On a Discord channel for the coin’s investors, legitimate queries were buried under a pile of spam. When Ryan started asking pointed questions, he was banned by the moderators. In a marketing email sent in February, Rebel Satoshi claimed to have entered into a “groundbreaking partnership” with crypto exchange BingX. But in an email message seen by WIRED, the exchange told Ryan there was no such partnership.
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