Thousands of Meme Coins Flooding Daily... "97% Become Worthless"

LEE SANG YUN

Summary

Meme coins are being mass-issued in the market by stimulating investors' speculative psychology, and it was revealed that 97% have become worthless.
Fake coins imitating celebrities like U.S. President Trump have appeared, causing consumer harm.
Regulations on meme coins are expected to be strengthened both domestically and internationally, with the SEC and domestic financial authorities preparing clear guidelines.

The Two Faces of Meme Coins - (Part 3) Emerging as a New Fraud Tool

Global Market Cap 15.3 Trillion Won '442% Surge'

Last Year's Trading Volume Increased 13 Times in a Year

Fake Coins Imitating 'Official Trump' Appear

'Meme' Issued by Celebrities and Influencers

Plummeted in Minutes, Investigated for Fraud Allegations

User Protection Measures in Korea

'Regulation Guidelines' Discussions Intensify

#1. On the 18th, U.S. President Donald Trump issued his meme coin 'Official Trump'. Two days later, his wife Melania Trump also released 'Official Melania Meme'. Within just a few days, 61 fake meme coins imitating the Trumps' meme coins appeared.

#2. Last year, a developer who claimed to have "no arms" evoked sympathy and introduced the HANDS meme coin. This coin quickly attracted a large amount of investment, reaching a market cap of $550,000 at one point. The developer's claim turned out to be false, and as he sold his share of the meme coins for profit, the coin's price plummeted, leaving investors to bear the losses.

Meme coins, which are siphoning funds in the cryptocurrency market, have emerged as a new fraud tool. They cleverly target human speculative psychology aiming for a jackpot. There is analysis suggesting that 97% of meme coins that have appeared in the real world have become worthless.

○ Encouraging Speculative Psychology

*Thousands of Meme Coins Flooding Daily... "97% Become Worthless"*

According to CoinMarketCap on the 23rd, the market cap of meme coins listed on global cryptocurrency exchanges was 15.258 trillion won as of 9 a.m. that day. Compared to January 24 last year (2.813 trillion won), the market cap increased by 442.4% in one year. During the same period, global meme coin trading volume (24-hour basis) grew from 2 trillion won to 27 trillion won.

Meme coins listed on cryptocurrency exchanges have at least passed listing criteria such as public support. However, according to Binance, the world's largest cryptocurrency exchange, 97% of meme coins issued as of November last year showed '0' trading volume. Since meme coins can be issued with just an idea, tens of thousands are created daily. On the meme coin creation platform PumpFun, about 50,000 meme coins are generated in 24 hours.

Meme coins are created inspired by popular humor, jokes, or images on the internet, so they have no intrinsic value. They differ from other cryptocurrencies that try to gain public trust by disclosing clear developers, technical capabilities, and future utilization plans. Due to the lack of value, their price volatility is also very high.

○ New Phase for Meme Coins

Cases of meme coins being used as fraud tools are also increasing. American influencer Hailey Welch created the meme coin 'HAWK' based on her popularity, but its price plummeted by 91% within 3 hours of launch, leading to an investigation for insider trading allegations. Jamaican-American singer Sean Kingston launched the meme coin 'KING'. Its market cap reached $4 million immediately after launch, but it dropped to $400,000, a tenth, in just a few minutes. There is analysis that one out of six meme coins is a blatant scam targeting investors' money.

There are also observations that the launch of meme coins by the Trumps has opened a new phase for meme coins. It is expected that the U.S. Securities and Exchange Commission (SEC) regulations will be strengthened. Virtual asset expert Andy Lian diagnosed, "The launch of the President's meme coin has blurred the boundaries between entertainment, politics, and finance," and "Accordingly, the SEC is in a position to choose whether to strengthen regulations further or to prepare clearer guidelines to adapt to reality."

○ Moves to Strengthen Regulations in Korea

There are signs that meme coin regulations will be strengthened in Korea as well. The Financial Services Commission announced that it would specify the listing requirements for poor-quality coins like meme coins. These requirements consist of △the reliability of the issuer △user protection measures △technology and security △compliance with laws, and are designed to check the non-disclosure of digital assets and the issuer's wallet information. A Financial Services Commission official explained, "Whether to use existing regulations or introduce meme coin-specific guidelines will be discussed later."

Jung Eui-jin/Jo Mi-hyun Reporter justjin@hankyung.com