As memecoin traders continue to lose money, some crypto leaders are calling for social pressure as a deterrent against insider-driven scams. On Feb. 17, Paradigm researcher Samczsun floated the idea of a social solution to memecoins’ insider problem. The researcher stated that if people agree that insider-driven memecoins are detrimental, they could start by “formally ostracizing” those involved in meme token scams. Samczsun suggested that this could make the potential for one-time gains not worth the risk of becoming “persona non grata” or unwelcome in the community.
Some community members supported the idea. One X user remarked that the community needs to make a serious effort to hold people accountable or risk losing the industry altogether. Another community member indicated that this could be effective, adding that the Mango Markets exploiter Avraham “Avi” Eisenberg was first convicted in the “court of crypto social public opinion” before facing criminal charges.
Solana co-founder says social layer “pitchforks” are problematic. Not all crypto leaders agree that social shaming is an effective deterrent. Solana co-founder Anatoly Yakovenko stated that social layer pitchforks are problematic since they react to an outcome instead of adhering to predefined rules. The Solana co-founder mentioned that it would be challenging for a memecoin, as the only way to implement this would be to force users to have a social credit score and reject coins with low score distributions. He added that while the community could ostracize a key opinion leader (KOL), the cabal behind the project would simply shift to a different KOL.
Crypto trader Jordan Fish, known as “Cobie” on X, stated that there’s no way to “effectively socially shame the shameless.” Fish noted that this phenomenon had been occurring even before the rise of memecoins. The trader asserted that each time someone was shamed, they simply used the attention to counter-accuse. Fish pointed out that there were YouTubers who remained popular despite constant shaming. He wrote: “The only people I’ve ever seen shamed off this app were relatively credible individuals who made a mistake, or who didn’t need to use it to make money. The people who should be shamed off here already know what they are doing, and they have chosen that path.” Meanwhile, DoubleZero co-founder and former Solana Foundation strategy lead Austin Federa stated that the social layer is effective at punishing sandwich attackers and poor products. However, Federa remarked that it is nearly impossible to target scammers and influencers because the targets are not part of the existing social layer.
President-linked memecoins lead to billions in losses. The debate over memecoin fraud has intensified following high-profile political token scams. On Feb. 11, Chainalysis data revealed that over 800,000 crypto wallets lost $2 billion after purchasing the Donald Trump (TRUMP) memecoin, which has since dropped 80% from its peak of $72.60 on Jan. 19. A similar scenario unfolded with Argentina President Javier Milei’s LIBRA token. After Milei endorsed the token on X, its market capitalization soared to $4.5 billion before insiders cashed out over $100 million, causing its value to plummet. The ongoing memecoin frenzy has reignited concerns regarding the integrity of the crypto market, with industry leaders divided on whether social accountability can mitigate fraud or if stronger regulatory action is necessary.