This type of cryptocurrency investment scam that uses false information to "pump and dump" is not uncommon; I just never thought I would get caught up in it.
Written by: Joel Khalili
Translated by: Luffy, Foresight News
It was a cold morning in February, 7:30 AM. After the alarm went off, I still felt groggy and bleary-eyed. I sensed something was off; my phone was lit up with notification alerts. As my eyes adjusted to the light, I began to check these notifications.
"Congratulations, you scammed the wrong person." A message from an anonymous sender appeared on my personal Telegram account, "You have 10 minutes to return the $2,800 you scammed from me." They included a cryptocurrency wallet address.
I was baffled, scouring my messages, emails, and social media accounts. The situation quickly became clear: someone had hijacked my X account and used it to promote a fake "Wired magazine cryptocurrency." As people bought this cryptocurrency, the price began to rise, and the scammer took the opportunity to sell off, leaving investors with nothing. Those who lost money were furious.
On the X platform, I found a plethora of furious insults directed at me, including various racial slurs from people who clearly had no grasp of world geography. "It's unbelievable that no one has come to your workplace to beat you up, you worm," one X user wrote. "You long-nosed, thin-lipped bastard," another person insulted me. "I hope you get hit by a car," someone else said.
Other users attempted to report my so-called misconduct to my employer: "Your person is here scamming money." One person wrote on X, tagging the official account of Wired magazine.
While these messages were unpleasant, there were few direct threats aside from the one from the anonymous Telegram user. "I am gathering a lot of information about you, including your address, relatives and friends at University College London (my alma mater), etc." they said, "If I don't receive a refund, I will make your life hell."
By 9 AM, I was still lying in bed trying to escape this trouble, my laptop resting on my outstretched legs. I contacted my editors, managers, and security personnel at Wired magazine, explaining what had happened and asking for help. I also messaged my partner, who replied, "Oh, damn!!!"
This type of cryptocurrency investment scam that uses false information to "pump and dump" is not uncommon; I just never thought I would get caught up in it.
"This is a very common attack method. The goal is to execute a simple pump and dump operation and cash out," said Phil Larratt, head of investigations at blockchain analysis firm Chainalysis, which helped Wired magazine analyze the mechanics of this scam. "To do this, they need a certain level of exposure, which is why they hacked into your account."
Just this year, several public figures' X accounts have been compromised to promote cryptocurrency pump and dump scams. Accounts of BBC journalists, politicians from the UK and Argentina, and the former vice president of the Philippines have all been used to promote fraudulent cryptocurrencies. Previously, accounts of Joe Biden, Barack Obama, and Bill Gates had also been hijacked for similar cryptocurrency scams.
Theoretically, the larger the influence of an X account, the higher the potential returns of a pump and dump scam, as it is more likely that a large number of people will buy the cryptocurrency promoted by the scammer. I rarely tweet, and I have fewer than 2,800 followers, which makes me less likely to be a target. But to the scammer, I was still valuable, as I could be perceived as a trusted authority among cryptocurrency journalists.
"The higher the exposure during the price-pumping phase, the more likely multiple investors will believe the promotion and buy in, ultimately taking the hit when the scammer sells off," said John Powers, president of private investigation firm Hudson Intelligence.
The X platform did not respond to requests for comment.
Although cryptocurrencies have been used in pump and dump scams for years, the emergence of meme coin issuance platforms has made such operations easier to execute, allowing anyone to create a cryptocurrency instantly and at low cost. In my case, the scammer used Pump.fun, currently the largest issuance platform, to mint a cryptocurrency branded with Wired magazine.
"Many cryptocurrencies issued on the Pump.fun platform are used for pump and dump schemes. When bad actors combine pump and dump with hacking X accounts, if done correctly, they can make a significant profit," Larratt said.
Troy Gravitt, a spokesperson for Pump.fun, stated in a message to Wired magazine: "We continuously invest to ensure the platform's safety for users. When we discover fraud allegations, such as hackers conducting token scams through hacked X accounts, we will delist those tokens from the front end to mitigate the potential harm to unsuspecting users."
Despite the prevalence of meme coin "pump and dump" scams, investors continue to flock to buy meme coins. "The appreciation of meme coins often occurs early in their issuance, shortly after they are launched," Powers said. "With such an opportunity, you might buy in at the right time and make a fortune… Timing is everything. For many, the legitimacy of the project is a secondary consideration."
I realized my X account was taken over on February 17, the day before the scam involving the Wired magazine cryptocurrency issuance. "Have I Been Pwned" (a service that helps people check if their information has been exposed in data breaches and hacks) showed that my X account credentials had previously been sold on a hacker forum, providing a possible explanation for my account being compromised. The kicker was that I had not set up two-factor authentication, meaning the scammer only needed my password to take control of my account.
Since the scammer changed my recovery email, I had to go through a long and arduous account recovery process via the X platform, which meant I could not immediately regain control of my account. By the next morning, it was already too late. Analysis of the trading data showed that the scammer who hacked my X account created the Wired magazine token at 1:20 AM that day.
When someone creates a cryptocurrency on the Pump.fun platform, they issue 1 billion tokens into circulation and typically buy some at a symbolic price themselves. According to Powers and Chainalysis's analysis, in this case, the scammer used the wallet that issued the token to scoop up about 5% of the total supply of tokens, then immediately acquired more tokens with two other wallets after trading began. They concealed their holdings from the investing public using these auxiliary wallets. "You can buy a certain amount of tokens you issued yourself. But if you buy a large amount, no one will buy in because it's very suspicious," Larratt said.
Overall, the scammer controlled about 12% of the total circulating supply of the Wired magazine token, a large enough amount that if they sold, it would cause the token price to plummet.
At 1:23 AM, the scammer began promoting this cryptocurrency on my X account; other X users' posts indicated they even did a live stream on Spaces. Although they later deleted various posts, by the time I woke up, the posts had disappeared, but screenshots captured by other X users revealed their fabricated scam.
Last weekend, Argentine President Javier Milei was embroiled in a scandal involving a cryptocurrency called "Libra" (Milei denied any wrongdoing). The scammer claimed on X that Wired magazine would launch its own cryptocurrency related to the Milei incident. "I spoke with the people behind 'Libra'… This might be the most interesting report I've ever written. He detailed the setup, process, and cashing out methods, and we even launched our own meme coin to show how easy this is," the scammer wrote in a post on my X account.
In the following minutes, some manual traders and bots programmed to scoop up newly issued cryptocurrencies began investing. As they bought in, the price of the cryptocurrency started to rise. At 1:36 AM, just 16 minutes after trading began, the total value of the meme coin peaked at $300,000. Then the scammer began to sell off.
On the trading platform Raydium, they dumped these tokens onto the market through a series of rapid trades, with analysts estimating they made a profit of about $8,000 to $10,000. By 1:45 AM, the Wired magazine token was nearly worthless.
"Compared to other pump and dump scams we've seen, the money they made this time isn't that much. But in just 20 minutes, their profits could be five times their investment," Larratt said.
At 2 AM, the revenue from selling the Wired magazine tokens was transferred to another wallet through a series of interconnected accounts. According to Chainalysis's analysis, this wallet may be linked to a cryptocurrency exchange service, where this revenue was mixed with hundreds of thousands of dollars worth of cryptocurrency from other unknown sources.
On February 19 and 24, that wallet deposited a total of $110,000 worth of cryptocurrency into Binance.
After that, the trail went cold. Although cryptocurrency exchanges are required to record the identities of account holders in most jurisdictions, they do not disclose this information unless requested by authorities.
"We do not disclose the identities of account holders to the media, out of respect for our law enforcement colleagues, to ensure the integrity of any ongoing investigations, and to prevent innocent users from being misidentified," Binance stated.
Larratt previously told Wired magazine that criminals often use "money mules" (people hired to transfer illegal funds) or stolen identity documents to open accounts at exchanges, meaning identifying account owners does not equate to identifying the scammers.
In the days following the meme coin pump and dump scam involving Wired magazine, I continued to receive messages from some people who believed I had scammed them. As before, the most blatant threats came from that anonymous Telegram user.
"If you think I'm joking, you're dead wrong," they wrote in a message, threatening to report me to Wired magazine's management, "Do you really think you can escape punishment?" they said in another message.
While I suspected these threats were bluster, they were still unsettling. To reduce the chances of someone finding me, I registered for a service that promises to remove my personal data fragments from the web. I also contacted my friends and family, who had also received indirect threats, and reported this harassment to the local police.
A week later, after I posted an explanation of what had happened on my X account, the insults and threatening messages stopped.
Meanwhile, people continue to flock to invest in the uncertain prospects of meme coins. Third-party data shows that the meme coin issuance platform Pump.fun earns between $1 million and $2 million daily by charging a 1% fee on transaction volumes.
On April 14, the anonymous Telegram user who threatened me posted two screenshots on X, boasting about the huge profits they made from recent meme coin trades. They wrote, "We are really idiots." This phrase used the derogatory term commonly employed by memecoin traders to brag about their willingness to take risks. Finally, they ended the post with an emoji with dollar signs for eyes.
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