Smart Money Under Scrutiny: Is Blockchain Tracker Abusing Trust?

Lookonchain smart money tracker features successful traders, claiming they are not insiders. But public data suggests otherwise.

A confused woman in a digital blockchain environment.

“Not an insider”—that’s how Lookonchain, a well-known smart money tracker, introduced a notable trader to its thousands of social media followers. Yet, open sources revealed that the alleged “not an insider” perfectly timed memecoin purchases before their listing announcements.

In the world of finance, both insider trading and false or misleading statements are forms of market manipulation, which is illegal as it aims to deceive.

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Yet, if there were signs that “not insider” was using insider information, the real question is why Lookonchain was so eager to convince us otherwise.

“Not an Insider” Who Bought Before Listings

On April 23, the Lookonchain smart money tracker alerted its social media followers to a notable wallet that boosted its gains from 300 SOL (~$50.5K) to 6,795 SOL (~$1.2M) by trading a Solana-based memecoin Book of Meme (BOME). 

The wallet bought BOME on a decentralized exchange right after Binance announced its listing. “Not an insider!” the company stressed in a post to over 380,000 of its X followers. 

However, publicly available data shows that such claims are just one piece of the puzzle. The trader did indeed purchase BOME after its listing on Binance. But a huge part of their profits came from the perfectly-timed BOME trades prior to other listings. 

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Blockchain records show that on March 14,  at 07:47 AM (UTC) the trader used 300 SOL to purchase BOME on Raydium Liquidity Pool, an automated market maker (AMM) built on the Solana blockchain.

Trader buys BOME for 300 SOL on Raydium Liquidity Pool. Source: Solscan

Later that day, two crypto exchanges listed the memecoin. BitMart listed BOME at 3:00 PM UTC, announcing about listing event just minutes earlier at 2:47 PM UTC. MEXC followed by listing memecoin at 4:30 PM UTC, with an official announcement at 3:26 PM UTC on the same day.

Binance also listed the memecoin a few days later, at 12:30 UTC on March 16, announcing the fact three hours before the event. 

Such a short time is a standard procedure among crypto exchanges, although it varies from minutes to hours and days depending on the particular trading platform.  

Binance announced the BOME listing on March 16, 09:30 AM (UTC). Source: Binance

What’s interesting is that Lookonchain’s “not an insider” sold their BOME holdings just two hours before Binance announced the upcoming listing, making more than $1.2 million gains from their initial 300 SOL investment. 

The moment BOME was listed on Binance, the trader bought it once again, this time for 3,000 SOL ($582,839).

The BOME buy and sell orders were placed between March 14 and March 16, when Binance officially listed the memecoin. Source: DEXScreener.

In the volatile and rapidly moving cryptocurrency market, perfectly timed trades often raise doubts about how they are possible without insider knowledge. Even experienced analysts hold back from bold statements, saying that a trader who behaves like an insider is “not an insider.” 

Perhaps Lookonchain simply made a mistake. Could such a statement be purely a case of human error?

“Not an Insider” Who Also Bought Before Listings

The situation repeated itself shortly after, as Lookonchain shared a story of another “not an insider”. 

This time, the wallet tracker featured a MANEKI and GUMMY memecoin trader, who made $1.09M by trading both memecoins.

“Not an insider, just a memecoin hunter!” highlighted the post. However, the publicly available data contradicted these claims once again.

According to the records, a trader used 250 SOL to buy millions of MANEKI at 03:04 PM UTC on April 22, or just a day before a series of memecoin listings on various crypto exchanges started. 

The next day, at 03:32 AM UTC, crypto exchange Poloniex announced the MANEKI listing and started trading memecoin at 02:00 PM UTC. Gate.io, MEXC, Bitget and HTC Global did the same within the upcoming three days, each issuing official announcements just hours before the actual listings. 

With each new listing, the trader successfully sold off their MANEKI holdings, earning an additional 4,035 SOL (~638K), coinciding with the memecoin’s price surge.

MANEKI trader buys memecoins ahead of the listings and places a range of sell orders during the days of its exchange listings. Source: DEXScreener

Suspect False Information

Blockchain analytics are typically seen as a trusted source that users feel they don’t need to verify anymore. Thus, Lookonchain’s statements sparked doubts from the crypto community.

Some followers raised questions about whether the alleged “not insiders” are the same people behind the memecoins. 

Crypto community questions the legitimacy of the “not an insider” trades, feautured by Lookonchain. Source: X

Others questioned the goal of such posts, suggesting they are meant to attract more traders into rug pulls – a type of scam in which developers withdraw all funds from a project, leaving investors with worthless assets.

Crypto community questions the legitimacy of the “not an insider” trades, feautured by Lookonchain. Source: X

There are grounds for such fears. Copy trading is gaining momentum in the cryptocurrency market. As it is fully based on mimicking other traders’ activities, any misleading hint from supposedly objective sources can have serious consequences for market participants.

According to surveys, copy trading is a highly popular tactic among Gen Z. Crypto users under 30 comprise up to 44 percent of all copy trading activities. 

It is also common among new or inexperienced traders, as copy trading allows them to start trading quickly without needing expert knowledge. On the other hand, it puts them at the highest risk of falling into potential manipulators’ traps.

Since any form of market manipulation poses risks of financial losses and undermines trust in the financial system, market participants are held to strict ethical standards. 

Financial authorities treat false and misleading statements as elements of criminal offenses and punish offenders accordingly.

However, lawyers acknowledge that proving market manipulation intentions is an extremely difficult task.

Misleading Statements Are Hard to Prove

“This certainly could have an element of fraud. For instance, if the aim is to attract interest in coins by showcasing successful trades, which might actually be influenced by insider information obtained from close sources,” Edvardas Jankauskas, a legal counsel at iSun, told me in an interview.

He suggests that there are various potential instances of mutual agreements between insiders and popular influencers. This could involve tactics like pumping and dumping, leading to suspicions that the trader might share their profits with the influencer.

However, proving that the information announcer and a possible insider could be connected is extremely difficult, especially in a largely unregulated cryptocurrency space.

“Maybe he is a friend of an insider, or perhaps that person is just a really successful trader. Distinguishing such things is extremely challenging without knowing the entire background. It’s still unclear what the next steps might entail.”

According to Jankauskas, there’s nothing wrong with disclosing such agreements; however, if they’re kept secret, suspicions arise about their true purpose.

Insider Trading Is Widespread

Market manipulations are nothing new in financial markets. Insider trading, where people trade based on confidential information from within a company that the general public cannot access, has been known since the mid-20th century.

Yet, in the inconsistently regulated cryptocurrency market, varying laws across jurisdictions create certain legal gray areas, making such cases more common.

In just three years, from 2021 to 2023, Solidus Labs, a company monitoring the crypto market, discovered that 56% of Ethereum-based token listings involved insider trading

According to them, insiders typically purchased coins on decentralized exchanges (DEXes) before they were listed on centralized counterparties:

“A cryptocurrency wallet buys the token using a decentralized exchange days or hours before its listing is announced by a centralized exchange or crypto platform. That wallet sells the token using a DEX shortly after.” 

One of the key signs that indicate insider trading is an asset price surge ahead of the listing. According to digital finance researchers at the University of Technology Sydney, asset prices typically rise up to 4.5 times higher ahead of the listing than on the day of the actual listing because of insiders. 

On the other hand, although insider trading is relatively common, there are not many legal cases against insiders in the crypto market. The first precedents were only set in 2023 when a former Coinbase manager and Opensea employee were found guilty of insider trading.  

Lookonchain: Prominent, but Elusive

It’s not just lawyers who find it challenging to build and win cases against crypto insiders. Ordinary market participants also struggle to figure out who stands behind potentially misleading statements and the well-known names in the industry.

In Lookonchain’s case, there is very little information available about it online. 

Its website says that Lookonchain is an AI-powered blockchain data analysis tool and has a top-notch  analytical team, which “provides users with the fastest and most accurate on-chain event interpretations.”

Founded in 2021, Lookonchain has a corporate office in Singapore and is backed by venture capital firm Old Fashion Research, established by former Binance executives Xin Jiang and Ling Zhang. Since then, it has been operating in stealth mode, meaning it works quietly and avoids public attention.

Its website also provides scarce information: a brief explanation of Lookonchain’s benefits, an anonymous user review, and links to the company’s Twitter and Telegram channels. There is no About Us, no team, and no contacts. Even the domain owner is protected for privacy, although by a registrar with a history of hosting online scams

Despite all that aura of secrecy, Lookonchain has gained a strong social media following—over 385,000 followers on X platform alone. Both CT (Crypto Twitter) and crypto media often cite their analytical interpretations of trending events.

However, the fact that Lookonchain is a prominent voice in crypto social media is exactly why it prompts the most questions. 

Can we really trust those whose business principles, ethical standards, partnerships, and connections remain completely unknown? What’s the real goal behind directing the community’s attention towards alleged insiders?

With so little information available about smart money tracker, these questions must be considered, especially when navigating the social media landscape, which is one of the most susceptible to misinformation abuse.

Social Media Fails to Tackle Misinformation

Today, social media stands as one of the primary sources of information for many. However, it’s also the most accessible platform for spreading deceptive content—like false or misleading statements or rumors—that influences public opinion.

Misinformation has been a global issue on social media platforms for years. While major platforms like X, Facebook, and YouTube attempted to limit the reach of fake accounts and false narratives, NATO’s latest report on social media manipulation revealed that social media giants keep struggling to prevent manipulation by commercial entities.

“Overall, no platform has improved compared to 2021, and, taken together, their ability to prevent manipulation has decreased.”

According to the report, buying manipulations on social media platforms remains cheap, although the percentage of accounts identified as fake and removed by the platforms has eventually declined.

As of today, most social media platforms still suffer from massive amounts of misinformation. For example, just last year, European Union officials identified X as one of the biggest sources of fake news. The messaging app Telegram is openly named as a key weapon in political disinformation wars.

Bottom Line

Identifying disinformation can be tricky. False and misleading statements, along with partial truths, can be cleverly mixed with real facts or presented alongside trusted names to appear more credible.

In financial markets, where one mistake can be costly, spotting such deceptive tactics is especially crucial. Therefore, it’s worth remembering that not everything is as it seems at first glance. Questioning everyone’s motives and doing your own research before making investment decisions is the only right choice.

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This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Simona Ram

Simona Ram is a senior journalist at DailyCoin, based in Lithuania, who covers the forces and people shaping the Web3 industry and the areas where decentralized crypto assets meet the centralized world. She has experience in business communication within the financial sphere and has a degree in Foreign Languages, which helps her interact effectively with sources from diverse backgrounds. In her free time, Simona enjoys exploring new cultures.