Recently, we reported on the meme-coin frenzy within the crypto space, particularly around the rise of Elon Musk-inspired GROK tokens. Since then, the leading GROK token’s market cap soared to $160 million, with its price rocketing by 13,000% in a week, drawing in 11,000 holders.
However, a new development occurred yesterday when on-chain analyst ZachXBT labeled the GROK token's creator a scammer. Following these accusations, the token’s value plummeted by over 40%.
Not that people in this space will care but @GROKERC20 $GROK was created by a scammer.
— ZachXBT (@zachxbt) November 13, 2023
Same exact X/Twitter account has been reused for at least one other scam.
X/Twitter ID: 1690060301465714692 pic.twitter.com/iKu7zb6YeS
The evidence seems fairly straightforward: GROK’s account on X (formerly Twitter), now boasting about 18,000 followers, was previously “reused for at least one other scam”. An earlier token project, ANDY, was launched from the same account and experienced a rapid price pump and dump right after its launch.
ZachXBT has gained notable popularity as an investigator in the crypto community, regularly exposing scams and frequently appearing in the news. With over 450,000 followers on X, it is not surprising that his announcement dramatically impacted the token’s price. Early buyers, sensing the potential for a steep decline, decided to take profits before the coin could potentially plummet to zero.
Reacting to the situation, the project developer engaged in 'damage control' by burning about 90 million GROK tokens, valued at $1 million. Although this amount is fairly small relative to GROK’s market cap, it did help to curb the panic, stabilizing the token’s price at about half of its peak value.
Furthermore, the developer addressed the concerns, stating:
“...If I do indeed have malicious intent with the deployer wallet, I would have easily sold them (GROK tokens) when the FUD attacks happened and just ride off with the millions of dollars and just deleted my TG (Telegram)...”
Additionally, some GROK community members defended the developer, pointing out that their previous project was not a scam but simply failed to gain traction and faded away.
Others ironically “thanked” ZachXBT, saying:
“thanks for saving me from the scammer by sending my coins to 0 before he does.”
It is perhaps not surprising that the developer, who had launched and possibly scammed other projects before, is in this situation. It is common for developers who release meme-coins daily to be involved in several 'scams'. However, their intentions can vary—sometimes they are malicious, other times not. When developers catch the right meme and support its growth, we can end up with those meme-coins boasting huge market caps and trading volume.
The situation really highlights the double-edged sword of meme-coins. They can be quite profitable, but the risk is high. Your gains can disappear in an instant, all it takes is one tweet to turn things upside down. So, navigating the meme-coin market is a balancing act between opportunity and uncertainty.
