HamstersGG Faces Rug Pull Accusations

Bored traders have resorted to wagering crypto on hamster racing for thrills, but blockchain sleuths are sounding the alarm that the project’s founders could be pulling the rug out from underneath its tokens’ investors.

On July 23, Artyst, a DeFi developer, tweeted that wallets believed to be controlled by HamstersGG insiders had profited $2M from offloading their HAMS tokens on unsuspecting investors.

“[Developers] purchased most of the supply within mins. This demanded knowing the exact launch time, to the millisecond,” they wrote.

The rug-pull accusations have stymied the growth of HAMS, with the token crashing 81% since tagging an all-time high of $3 two days ago. HAMS now has a $5.6M market cap, with 24-hour volume equating to 71% of the token’s capitalization.

The owner of one wallet that invested $500,000 into HAMS changed their ENS domain to “imnotunderwateryouare.eth” in response to the crash.

Memecoin Risks

The allegations facing HamstersGG serve as a cautionary reminder of the risks associated with investing in low-capitalization tokens floated by anonymous development teams.

With memories of abrupt fortunes made in April and May amid a memecoin trading frenzy still fresh in the minds of many investors, opportunistic scammers may see crypto traders overcome with FOMO as easy prey.

“You always need to be extremely cautious and not get caught up in the hype,” Artyst said. “More often than not, it's merely a strategy to induce you to make you their exit liquidity… Only today they shamelessly dumped $108,000 of HAMS in one transaction.”

Artyst also noted that HamstersGG developers also made $2M from a 30% initial tax on token purchases. “This is acceptable, as it was common knowledge that taxes were involved,” they added.

Animal Racing Tokens

HamstersGG recently emerged as a popular pastime among degenerate crypto gamblers, with the project’s Telegram attracting thousands of punters.

Users can bet on the outcome of pre-recorded races between hapless rodents. Players that bet on the winning hamster split 95% of the wagered funds with HamstersGG taking a 5% cut. HamstersGG’s pseudonymous developers have acknowledged there is no way of guaranteeing they are not wagering on the races.

The buzz surrounding HamstersGG has inspired an entire category of “Animal Racing” tokens on CoinGecko. While several of the tokens correspond to web3 games involving gamified breeding mechanics, The Rabbits Club, Snails Race, and Rat Roulette claim to facilitate wagering on events featuring live animals. HAMS accounts for 85% of the sector’s capitalization.