Memecoin History Repeats Itself: WOLF Plummets 99%
Hayden Davis, the controversial creator behind the Libra (LIBRA) token and Official Melania Meme (MELANIA), has once again found himself at the center of a memecoin scandal. His latest project, WOLF, a Solana-based memecoin launched on March 8, quickly surged to a $42 million market cap before experiencing a catastrophic 99% collapse within two days.
Blockchain analytics firm Bubblemaps uncovered alarming on-chain activity associated with WOLF, revealing that 82% of the token’s supply was controlled by a single entity—a pattern strikingly similar to previous projects linked to Davis. This revelation has reignited concerns about insider trading and market manipulation within the growing memecoin sector.
Davis’ Pattern of Insider-Controlled Memecoins
WOLF’s launch came amid speculation that Jordan Belfort, famously known as “The Wolf of Wall Street,” was preparing to release his own cryptocurrency. Davis capitalized on these rumors, pushing WOLF into the spotlight and attracting significant investor interest.
However, Bubblemaps quickly identified a familiar pattern in WOLF’s distribution, similar to Davis’ past token HOOD. The analysis traced fund transfers across 17 different addresses, all linked to a single source wallet identified as “OxcEAe”, previously associated with Davis.
According to Bubblemaps, these wallets were funded months before LIBRA and WOLF were launched, with Davis strategically moving assets between multiple chains and addresses to disguise his involvement.
By March 15, just a week after its launch, WOLF had plummeted to a market cap of only $570,000, a staggering loss from its $42.9 million peak.
The Aftermath of the Libra Token Scandal
Davis’ latest venture follows the collapse of his previous token, Libra (LIBRA), which turned into one of the most infamous rug pulls in memecoin history. In that case, eight insider wallets collectively cashed out $107 million in liquidity, leading to a $4 billion market cap wipeout within hours.
The Libra debacle even escalated into a political controversy, with Argentine President Javier Milei facing impeachment threats after publicly endorsing the token. In response, Argentine lawyer Gregorio Dalbon called for an Interpol Red Notice against Davis, warning that his financial resources could allow him to evade U.S. law enforcement or disappear altogether.
Memecoins as “Retail Value Extraction Tools”
As memecoins continue to dominate crypto speculation, industry leaders are raising alarms about their increasingly exploitative nature.
Anastasija Plotnikova, CEO of blockchain regulatory firm Fideum, argued that memecoins have strayed from their original purpose, becoming tools for retail investor exploitation rather than community-driven assets.
“Memecoins have evolved from community-driven social experiments into a chaotic landscape dominated by value extraction from retail investors,” Plotnikova stated.
She highlighted the rise of insider trading, pump-and-dump schemes, and sniper groups, which now dictate the market, replacing the organic, collectible nature that once defined the memecoin movement.
For investors, distinguishing between genuine collectible memecoins and outright fraudulent schemes is becoming increasingly critical. Plotnikova warned that rug pulls and insider trading are not just unethical but outright illegal, with case law supporting their enforcement.
“These activities should firmly fall within the jurisdiction of law enforcement agencies,” she added.
Regulators Take Action Against Memecoin Scams
U.S. regulators are taking notice of the growing number of fraudulent memecoin schemes. On March 6, a New York lawmaker proposed a bill to criminalize cryptocurrency fraud, introducing specific penalties targeting “virtual token fraud” and deceptive practices like rug pulls.
The bill aims to establish legal consequences for memecoin scams, reflecting the increasing urgency for regulatory oversight in the crypto space.
As memecoin-related fraud continues to escalate, investors are urged to conduct thorough due diligence before investing, while regulators intensify their efforts to curb malicious actors in the industry.
