- Jill Gunter says Milei-promoted LIBRA is a 'grift too far.'
- DL News calculates $17.5 billion in losses from just four memecoins.
- The memecoin crisis strikes just as Washington is weighing legislation.
Memecoins aren’t funny anymore.
What started as a monetised mashup of viral jokes and pop culture has now morphed into multi-billion dollar fiascoes that are enriching insiders at the expense of investors.
In the latest scandal, a memecoin called LIBRA touted by Javier Milei, the president of Argentina, soared to $4.5 billion in value within an hour of its launch before plunging 80%.
Now, Milei is facing calls for his impeachment and multiple investigations.
And a growing number of influential crypto industry figures are fed up.
“Memecoins have undoubtedly damaged the industry’s reputation,” Jill Gunter, the co-founder of Espresso Systems, a cross-chain network, told DL News.
“I was more comfortable explaining the Silk Road to my parents when I started getting interested in crypto in 2014 than I am explaining memecoins,” added Gunter, who has consulted the International Monetary Fund and the World Bank on crypto initiatives.
Damaged brand
Ever since the days when Ross Ulbricht ran his dark web emporium, crypto has been associated with money laundering and other illicit activity.
Now a memecoin landslide — there are thousands of them — is further despoiling crypto’s brand.
“This overshadows legitimate teams and projects building things, even on Solana, and paints the entire ecosystem as a value-extracting industry people should beware of,” Eylon Aviv, a partner at Israel-based VC firm Collider, told DL News.
Memecoins are driving the crypto story just as the asset class is closer than ever to leaping into the mainstream.
In Washington, the Trump administration and Congress are poised to approve long-desired measures that will finally bestow the $3.3 trillion digital assets market with “regulatory clarity.”
On Wall Street, several asset management giants are angling to follow the rollout of Bitcoin and Ethereum ETFs with a slew of new funds for Solana, XRP, and other altcoins.
‘It was a grift too far.’
— Jill Gunter, Espresso Systems
And stablecoins, dollar-pegged cryptocurrencies, are rapidly being integrated into the payment processing infrastructure.
So why are members of Congress talking about Hawk Tuah, the raunchy memecoin that captured the imagination of investors in December as it skyrocketed in value and then plunged 80% in value?
Soul-searching
Because they are suddenly quite wary of cryptocurrencies with no intrinsic value, suggests Ron Hammond, the senior director of government relations for the Blockchain Association.
“There’s a question if it’s beneficial to anyone and beneficial to the market as a whole,” Hammond told DL News.
Ironically, it’s Donald Trump, the crypto-loving president, who triggered this bout of soul-searching.
The launch of the TRUMP memecoin days before his inauguration as president on January 20 drew immediate fire from crypto folk as a brazen cash grab. Then the First Lady followed with her own memecoin.
Both offerings skyrocketed at first and then cratered as early movers cashed out.
As it happens, Hayden Davis, the CEO of Kelsier Ventures who said he had a hand in launching Melania Trump’s memecoin, was also involved in launching LIBRA.
Gunter, who co-founded the Open Money Initiative, a research group, says the reputational threat has been looming ever since a token linked to a picture of a Shiba Inu wearing a crocheted beanie began rising in 2023.
“A friend outside of crypto messaged me about it,” she said. “That’s when I knew we had a problem.”
By 2024, memecoins had been industrialised as outfits such as Pump.Fun provided “developers” with low-code launch platforms on Solana.
“It combined schizophrenic Gen-Z type FOMO aesthetic, with really simple user experience to launch tokens,” Aviv said.
The platform lets anyone spin up their memecoin with a few mouse clicks.
The creators can then set up a live video stream to attract attention — the lifeblood of any memecoin. The onus then falls to so-called Pump.Fun devs to market their tokens.
The more outrageous the stream, the more likely to grab traders’ attention. The results have been shocking.
One memecoin creator named Beni, wearing a wig, fake beard, and black clothes, appeared on the livestream under a noose in November.
He threatened to kill himself unless traders bought his token. Later that day, Beni appeared to have committed suicide. DL News reported that it was a fake stunt.
“This was sadly insufficient to turn off the industry,” Gunter said.
Pump.Fun scales
Meanwhile, C-list celebrities such as pop singer Jason Derulo and Kardashian alum Caitlyn Jenner started tapping Pump.Fun to cash in on the memecoin mania in 2024. Both of their tokens have tumbled 99% from their all-time highs, according to CoinGecko.
Gunter called the launch of internet celebrity Haliey Welch’s memecoin HAWK another watershed moment.
At the time of its launch in December, critics called the HAWK token a pump-and-dump — it spiked to $500 million shortly after debuting, before dropping to $50 million just 30 minutes later.
For developers and long-time entrepreneurs, these pump-and-dump tokens have been highly destructive.
And if the TRUMP launch was the memecoin crescendo, Milei’s bungled attempt may finally signal a turning of the tide.
“A grift too far,” said Gunter. “Memecoins are pure extraction. This is not onboarding. This is just damage.”
Liam Kelly is a Berlin-based reporter for DL News. Got a tip? Email him at liam@dlnews.com.