Memecoin mania briefly sends Book of Meme past $1 billion in market cap amid insider trading controversy
- BOME briefly surged past $1 billion in market capitalization as Binance begins investigation into insider trading incident.
- Crypto traders show huge risk appetite as more than $100 million worth of SOL has been sent into meme projects.
- Other investors raise concerns about controversial presale methods amidst the meme coin rally.
Book of Meme (BOME), a recently released meme coin on the Solana network, saw a huge boost to $1 billion in market capitalization on Monday after its launch on Binance. However, the crypto community has raised awareness about a "BOME rat warehouse" incident that may be related to insider trading on the exchange.
BOME insider trading in Binance?
Book of Meme (BOME) saw increased attention recently after some crypto community members pointed fingers at Binance for conducting insider trading. Suspicions started rising after the largest crypto exchange listed the coin barely three days after it went live.
With the increased volume of Binance, BOME briefly skyrocketed 36,000% to $1.45 billion in market capitalization on Saturday from around $4 million three days earlier, according to data from Coingecko. While the surge made the founders rich, many investors accused Binance that one of its staff may be conducting insider trading.
However, the exchange had stated through a statement on X (formerly Twitter) that after an internal investigation, "the person mentioned in the relevant information has no connection with Binance."
Solana memecoins mania fuels risks
This BOME episode comes after a recent presale meme coin mania on the Solana network. Within the last 72 hours, memecoin presales on Solana have garnered over $100 million, sending the price of SOL to $200.
As memecoins continue their surge, indications show that crypto market participants are beginning to show signs of increased risk and greed appetite, according to Coinmarketcap's fear and greed index.
Crypto fear and greed index
It could also be that newbies attracted by Bitcoin's (BTC) all-time high and recent gains in altcoins are partly fueling the meme mania.
Also read: Solana-based meme coin SLERF surges more than 3,700% as developer burns $10 million presale
Crypto investors warns of potential rug pulls from presale tokens
Many investors have warned that this character of increased memecoin purchases via token presales is reminiscent of rug pulls that profit off Bitcoin's popularity.
Token presales are a method of raising money before a protocol goes live. It involves sending cryptocurrency to a project's wallet address in order to receive its token when it launches. However, there's no guarantee that you'll receive any tokens or get back your money if the project fails to launch.
As a result, token presales have been a popular way of conducting rug pulls and pump-and-dump scams, especially during bull seasons like the current one
One X (formerly Twitter) user noted that sending money to a memecoin presale with a 99.9% chance of rugging is a risky bet. Another stated, "One minute you are thinking you'll own a Benz, the minute you're crying rug pull." It's important for investors to do their own research before investing, considering the billions of dollars lost in crypto scams yearly.
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