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Memecoin Teddy Doge is the target of rug pull

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The cryptocurrency-meme Teddy Doge (TEDDY), created on the BNB network, suffered a rug pull attack this Monday morning (25). According to security firm PeckShiel, developer-linked Teddy Doge (TEDDY) wallets sold more than $4.5 million over the weekend.

This caused concerns among investors, who feared an eventual coup against the network.

Token exchanges

As per PeckShield’s analysis, wallets exchanged several TEDDY for thousands of wrapped BNB, an equivalent of BNB issued in ETH. Everything indicates that the group made the exchange with the aim of selling the tokens, but without drawing attention.

“The deployer deployed the contract and transferred a large amount of TEDDY to 0xdbe8ef79a1a7b57fbb73048192edf6427e8a5552, then pumped and dumped the $Teddy price,” PeckShield said.

The company defined the attack as a “soft rug pull”. That is, an attack that did not cause a sudden drop in the value of the cryptocurrency. Apparently, the developers intended to move discreetly precisely to avoid panic and suspicion.

In that sense, the developers didn’t make any major changes to the code either. Instead, they preferred to take the TEDDYs from the general account and split them into several parts. Then they executed the sales little by little, so as not to attract attention.

For Jisu Park, CEO of the South Korean security company Sohoo, the developers did not abandon the project altogether. That’s why it’s not a classic rug pull.

“This isn’t an attack, it’s a rug pull. But it’s unclear if they dropped the project, so we can call it a ‘soft rug pull,'” he claimed.

Funds Sent to Binance

After exchanging their TEDDYs for wrapped BNB, PeckShield said the addresses performed a number of other operations. As a result, the developers got over 10,000 in original BNB as well as $2 million in the BUSD stablecoin.

After converting the funds, the developers sent all the money to Binance, with slow transfers. It remains unclear how much they managed to sell.

The ease of rug pull is due to the fact that the developers controlled the project’s liquidity pools. With that, they had access to the tokens and do the entire operation, draining part of the liquidity and gaining control over the tokens.

In decentralized finance (DeFi), rug pulls are scams where developers do legitimate work on a blockchain and then drain the project’s liquidity pools, essentially “pulling the rug out” from investors and causing a sharp drop in the value of the assets. tokens.

In general, rug pulls occur in new projects, whose purpose is not very clear or simply does not exist. Meme cryptocurrencies or those inspired by famous works – such as the SQUID token, inspired by the Round 6 series – are the main examples of this type of scam.

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All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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