- A scammer profits off pump-and-dump memecoins.
- The scammer asks Reddit for tax advice on his ill-gotten gains.
- Redditors blast the scammer as delusional.
The lure of overnight riches in crypto can be hard to resist at the best of times. Just look at the Bonk memecoin, which triggered a frenzy of hype and expectation as its Q4 2023 performance brought tens of thousands of percent gains for early investors.
Tired of missing out on the next Bonk, or Dogecoin for the class of 2021, one ambitious mastermind took matters into his own hands by creating and peddling worthless memecoins designed to steal liquidity from unsuspecting hype beasts gambling on the next big thing.
After grifting a bunch of hype chasers, you’d think the scammer would be lying low, perhaps configuring his dream-spec Revuelto on the Lamborghini website or maybe even scanning Chrono24 for an Audemars Piguet or two, wondering if they accept crypto. But no, our intrepid huckster took to Reddit for advice on how to treat his ill-gotten gains for tax purposes. The responses were…let’s just say unsympathetic.
FCA Coming For Scammers
The scammer originally posted his call for tax advice on the r/UKPersonalFinance subreddit but quickly deleted it after what one assumes was a moment of clarity. However, thanks to an eagle-eyed Redditor, the post was screenshotted and shared in the notoriously crypto-unfriendly r/Buttcoin subreddit.
In the post, our prolific memecoin creator openly admitted to launching memecoins to profit off the hype. The UK’s Financial Conduct Authority (FCA) does not have any specific regulations around memecoins, opting instead to govern cryptocurrency in general under advertising and marketing rules, namely supervising claims of “safety,” “security,” and adequate risk warnings.
Under this remit, the FCA’s director of consumer investments, Lucy Castledine, stated that the agency is ramping up its efforts to scrutinize online crypto promotions, “And for those touting products illegally, we will be taking action against you.”
Scammer Wants to Pay His Taxes
Seemingly unaware of the regulatory repercussions of touting rug pull memecoins, our scammer took the moral high ground by making clear that he never makes promises to investors or abandons projects, instead choosing to let his projects die a natural death as hype chasers leave in search of the next shiny memecoin and volume dries up.
“I do not make any promises or plans and the projects do not have roadmaps, I do not abandon these projects half way through either, I continue engaging with the communities until volume naturally halts, the hype dies down and the degenerate traders make their move onto the next big thing,” wrote the scammer.
Worse still, our scammer asked Reddit about the “legality of all this” and whether he screwed up by not acquiring the appropriate licenses to peddle a rug-pull cryptocurrency. Does the real kicker come when the master manipulator inquires what tax category his ill-gotten gains fall into, capital gains or income tax?
Must Be Trolling
Our ambitious memecoin creator seemed blissfully unaware of how audacious his scheme appeared to outside observers. Remember that conjuring tokens out of thin air and stealing liquidity with no intention to develop is just part of the hustle culture in 2024. Some would argue that’s the crypto industry in a nutshell.
Nonetheless, r/Buttcoin participants were quick to post their disapproving commentary. One Redditor summarized the post as “I scammed a bunch of idiots, tell me how I can get away with it pls?” another reacted by detailing the FCA’s punishment for failing to comply with money laundering regulations.
“OOP [sic] has admitted to breaking the law by advertising investments without being authorised by the FCA, punishable by up to two years in prison, an unlimited fine, or both,” stated the r/Buttcoin participant.
However, the biggest irony is that UK tax law requires all profits from a trade to be taxed, whether or not the trade itself is illegal or immoral. This makes you wonder whether the scammer was on point and whether we are the ones out of touch with reality.
Read about the uptick in crypto developer job scams here:
Beware of Crypto Job Scams Targeting Blockchain Developers
Find out more on Argentina’s pioneering changes to contract law here:
Argentina Sees First Bitcoin Rental Agreement Signed