At least 15 blockchain wallets suspected of insider trading have turned an initial $14,600 investment into over $20 million, raising concerns about transparency and fairness in cryptocurrency markets.
The 15 insider wallets made over $20 million in profit on the Focai.fun (FOCAI), a memecoin recently launched on Solana’s (SOL) memecoin launchpad Pump.fun.
The suspected insiders have made an over 136,000-fold return on their initial $14,600 investment, which bought them over 60.5% of the total token supply, according to onchain analytics firm Lookonchain. “They then sold all their $Focai for 94,175 $SOL($20.5M), netting 94,108 $SOL($20.48M).”
FOCAI insider wallets. Source: Lookonchain
The concentration of such a large share of tokens in a small number of wallets has drawn criticism from blockchain analysts. The situation highlights potential risks to decentralization, which is a key principle in cryptocurrency.
FOCAI/USD, all-time chart, market cap. Source: Pump.fun
The FOCAI token peaked at over $46 million in market capitalization at 4:45 am UTC. The token’s market capitalization fell nearly 14% to $39.6 million as of 11:55 am UTC, Pump.fun data shows.
Related: Crypto whale up $11.5M on AI token position in 19 days
One wallet made nearly $3.5 million in three hours
Among the 15 wallets, one particularly profitable address, labeled “9DtTb,” made $3.47 million within three hours. Onchain Lens, a blockchain analytics platform, detailed the transaction:
“The insider bought 123.32M $FOCAI for 5.39 SOL ($1,168) on Pump.Fun. The insider then sold the entire $FOCAI for 16,070 SOL worth $3.47M. The insider made a x2973 profit.”
Focai insider wallet “9DtTb” selling patterns. Source: Onchain Lens
Despite their intrinsic lack of utility, memecoins can be profitable investments for a small percentage of traders. In December, a savvy crypto trader turned $27 into $52 million after printing an over 1.9 million-fold return on his initial investment in the Pepe (PEPE) token.
Related: SOL rebounds above $200, Aave deposits hit $33.4B record: Finance Redefined
Over 99% of Pump.fun traders are unprofitable
However, the majority of memecoin traders remain unprofitable.
Over 99% of traders on Pump.fun have lost money or made less than $1,000 in profit.
Out of the total 9.8 million wallets, only 50 have generated up to $1,000 worth of returns, while five wallets have generated between $1,000 and $10,000.
Wallet distribution with profit on Pump.fun. Source: Dune
Only one wallet managed to generate over $10,000 in profit, Dune data shows.
Magazine: Down to $200 one day, Pixels founder had $2.4M the next: Luke Barwikowski, X Hall of Flame
