Memecoins are evolving into retail investor traps, with insider trading and rug pulls raising regulatory concerns, industry observers told Cointelegraph.
Memecoins, once seen as community-driven digital assets, are increasingly being used to exploit retail investors, with a growing number of scams and failed celebrity-backed tokens raising regulatory concerns.
The $4 billion collapse of the Libra (LIBRA) token, which was endorsed by Argentine President Javier Milei, is the latest blow to the sector after eight insider wallets cashed out $107 million in liquidity, leading to a price decline of 94% within hours of its launch.
The rise of memecoin-related scams presents significant regulatory challenges, according to Anastasija Plotnikova, co-founder and CEO of blockchain regulatory firm Fideum.
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