The Baby Musk Coin, named after Elon Musk, appears to be on the verge of a collapse, as its value has plummeted by about 100%. According to reports, the project’s developer dumped the tokens, causing the market to plummet dramatically. In what is known as a honeypot, holders of the coin are unable to sell the token.
During its initial coin offering (ICO) in early February 2022, the project raised almost $2 million. The token’s creators went to great lengths to make the initiative appear respectable, claiming that their goal was to “revolutionize the meme industry.” The Baby Musk Coin website, which is now defunct, contained a roadmap outlining the project’s future ambitions.
When the coin was released, it immediately saw a price increase, and the apparent CEO Grant Liu stated that it was “only the beginning.” Some of the features offered by the project include an index fund and a “Baby Musk Swap.”
This is the latest in a long line of heists that have afflicted the cryptocurrency sector recently. Scammers have used popular culture to prey on naïve victims, from Squid Coin, based on the popular TV show Squid Game, to bogus Banksy NFTs.
Scams will continue to be a major feature of the crypto sector in 2022 as projects work to combat the problem. Scams involving NFTs, in particular, appear to be on the rise right now, as unscrupulous actors take advantage of the increased interest in the area. Apart from bogus artwork, NFT marketplaces are also having problems, with $2.2 million in Bored Ape NFTs stolen, causing OpenSea to halt operations.
Perhaps more concerning is the UN’s accusation that North Korea is using stolen bitcoin to fund its missile programme. The country has been accused of stealing at least $400 million from cryptocurrency exchanges, according to Chainalysis.
The most effective approaches to counteract fraud are education and awareness. Better investor protection legislation, which is expected to be enacted this year, may also aid in preventing losses.