What Happened To BALD?

A very well-funded scammer just made $6 million on a P&D coin

What Happened To BALD?

A new memecoin rose and fell over the weekend on Coinbase's new L2. Named BALD, in a reference to Coinbase CEO Brian Armstrong's signature haircut, the coin saw frenzied speculation and dizzying highs, before the deployer pulled his (or her) liquidity and the price crashed in a classic P&D rug pull scam.

What is interesting in this case is not that the BALD rug happened in the first place. Memecoin P&Ds are hardly something new in the crypto space. And it's not that it happened on Base, Coinbase's L2. That's practically a right of passage in DeFi: An indication that a network has gained enough traction to be worth using as a host for a major scam.

What's really eye-catching here is the sheer amount of cash the scammer was prepared to throw at it.

Well-Funded Scammers

P&Ds are a popular tool for crypto scammers, who can operate with relative anonymity. The theory is simple:

  • Mint a new token
  • Put in on a decentralized exchange (no KYC) with some initial liquidity
  • Pump the price by publicizing it on social media and making some initial buys to induce FOMO
  • Let speculators drive the price up
  • Yank your liquidity, which will now mostly be in the paired token
  • Disappear and spend your ill-gotten gains on yachts, cocaine, etc

The more initial liquidity you can deposit, the more money you can make. In this instance, the figures are staggering, pointing to an extremely well-funded individual or organization.

Scimitar Capital analyst @thiccythot_ trawled the blockchain for information, finding that the deployer added a total of 6,700 ETH in initial liquidity to LeetSwap (Base's primary AMM) over the period of several hours, worth $12.5 million. That was cause for confidence among traders, and there was plenty of speculation that the well-funded deployer was none other than Brian Armstrong himself.

Price followed that liquidity, soaring 3,000%, before cooling off. As the price dropped, the deployer bid to pump the price once more and reinvigorate confidence, causing another spike—at which point, they withdrew over 10,500 ETH, worth almost $20 million.

Overall, the deployer's net profit was over 3,100 ETH, or almost $6 million.

Who Was Behind This?

There aren't many people with $12 million in spare seed capital and the expertise to pull off a successful DeFi P&D. This kind of "investment" would normally be the preserve of crypto hedge funds. Or, just perhaps, a well-funded individual with little left to lose from additional legal scrutiny?

SBF is under house arrest, with strict conditions that do not allow him unfettered internet access. By some accounts, he's limited to a flip phone and a few news websites on his laptop. So, while it makes for a nice story, it's unlikely to be him—though, as we've discovered too many times before, in crypto the truth is often stranger than fiction.

A crypto OG who turned pennies into millions? A state-sponsored collective like North Korea's Lazarus Group? A rogue hedgie? Thanks to the transparency of the blockchain and the tools available to online sleuths, there's a good chance we'll find out more in due course.

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