24 hours can be a long time in crypto. In just 24 hours the BALD meme-coin, which was deployed on the new layer-2 Coinbase blockchain, pumped 4,000,000% (making a $500 trader into a millionaire), had liquidity pulled then pushed then pulled by the token deployer, and finally dropped back to less than its starting price.

Less than 24 hours after that, blockchain detectives had linked wallet addresses used in the apparent rug-pull to disgraced former FTX CEO Sam Bankman-Fried and his crypto trading firm Alameda Research. That’s quite a lot to unpick, so let’s get to work.

It was an ordinary day on the blockchain

Coinbase’s layer-2 network, Base, launched its mainnet to builders on July 13, according to a tweet. However, its public launch was not due until August, to allow more time to onboard users before implementing its web-based user-interface. As we Observed back in March, Base is designed as “a secure, low-cost way for anyone, anywhere, to build decentralized apps on-chain.”

Despite ordinary users being warned away, some investors have chosen to access the network through developer tools in order to buy up assets before the official launch in the hopes of making early returns.

Hello, I'm BALD

Enter stage right, BALD, a token seemingly named and deployed in honor of nothing greater than Coinbase CEO Brian Armstrong’s lack of hair. As we know, crypto degens just love themselves some meme-coins, so obviously the coin pumped hard based on this… because, bald man funny, right?

At its peak the token value had risen 4,000,000%, making a millionaire of the aforementioned trader. It should be noted however, that the trader in question has previously been associated with a Solana NFT scam, so may well have been in on the rug-pull from the outset.

It was then that Twitter users started to report that significant liquidity was being pulled by the deployer and others. On social media the deployer denied selling tokens:

“I didn’t sell a single token at any point since deployment. Just added/removed 2 sided liquidity and bought.”

However, when another user pointed out that ‘adding two-sided liquidity’ involves selling tokens, the BALD deployer simply replied, “correct.”

The deployer then added some liquidity back into the market, posted a bizarre tweet to give those degens another nudge to buy, then pulled all of the remaining liquidity and rode off into the sunset… or that would have been the case if not for the fact that the wallet moving the funds had apparently been KYC’ed on a centralized exchange.

Schoolboy error

Wind forward a day and commenters are pointing the finger at Sam Bankman-Fried or a member of his team at Alameda Research. Some of the evidence for this is tenuous at best, such as Bankman-Fried’s tendency to give the one-word answer, “correct.”

However some ‘evidence’ is more compelling, such as Cinneamhain Ventures partner Adam Cochran’s tweet noting that the BALD wallet address had been heavily involved with SushiSwap governance votes, at the same time that SBF had stepped in to help rescue it.

Or the crowdsourced Reddit investigation which connected the BALD token deployer’s address to $242 million of deposits to a Binance customer address, which also received $141 million from an address strongly linked to Alameda Research.

Of course, Bankman-Fried shouldn’t be able to do these things personally, as he is under house arrest and supposedly has internet access severely limited, although reportedly his legal team and the prosecution have “had trouble keeping tabs on his internet activity across a variety of devices in the home.”

Perhaps more pertinently, if it was Bankman-Fried, then why would he use a wallet address so easily linked back to himself and Alameda Research? We shall continue to Observe this story as it continues to unfold.

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