Trump-themed meme coin DJT drama: issuer "self-exposes" and has a history of fraud, token drops over 60% in a day

Author: Nancy, PANews

PoliticalFi is the focus of attention in this round of the bull market. Recently, the MEME coin DJT exploded in popularity due to rumors of being "the purest Trump concept coin," but then a series of twists and turns unfolded, ultimately leading the mysterious operator Martin Shkreli to reveal his identity during a bounty event.

Hard to Distinguish Truth from Falsehood, Using Information Asymmetry and Public Opinion to Build Influence

As a strong contender in the U.S. presidential election, Trump-related MEME tokens have become hot topics in the market, especially after he incorporated cryptocurrency into his campaign strategy, which boosted investor sentiment.

On June 18, foreign media Pirate Wires tweeted, "There are rumors that Trump is launching the official token $DJT on Solana," but the media did not provide a source. Several other media outlets also reported on DJT, with Fox Business stating, "While we cannot confirm a direct or indirect relationship between the DJT token and Trump, associates of the former president plan to launch a digital currency within at least two months." Pirate Wires cited an unnamed source claiming that Trump's son Barron is leading the project, but the editor later clarified that he "did not speak directly with Trump, and Trump might say this is not true in a roundabout way," and stated he would no longer report on related crypto news amid community disputes.

However, Trump's well-known supporter Bo Loudon claimed in a post that "DJT is the only real Trump token" (now deleted), adding more credibility to DJT, which caused multiple Trump-themed tokens to collectively drop, with some investors even selling off millions worth of the leading token TRUMP. In contrast, DJT's market cap once surpassed $400 million.

Additionally, massive bets added more intrigue to DJT. Martin Shkreli, former president of Turing Pharmaceuticals, hinted that DJT is Trump's official token and placed bets worth millions or even hundreds of millions with several crypto KOLs, such as GCR, who bet $100 million on "whether DJT is launched by Trump." Who would have guessed that this pharmaceutical mogul's executive is the true manipulator?

While the community was skeptical, blockchain data company Bubblemaps published an analysis stating that DJT is actually not related to Trump, with about 67% of DJT's supply concentrated in one cluster, and 43% of the total supply located on the Solana ecosystem's automated market maker Raydium.

On-Chain Detective Steps In to Solve the Case, Issuer Urgently Reveals Identity

To find the true mastermind behind DJT, the on-chain data analysis platform Arkham announced that Arkham Intelligence would offer a $150,000 bounty to anyone who could clearly prove the identity of the issuer of the Trump-themed Solana token DJT. Subsequently, on-chain detective ZachXBT stated on the platform that he had submitted a bounty application to Arkham for the identity of the DJT token issuer.

ZachXBT tweeted, "Martin Shkreli urgently DM'd me after I announced submitting the bounty application for the DJT token issuer's identity to Arkham, then he hastily released a statement claiming he issued the token, it's really ridiculous." He also asked, "Should we expose the insider friends Martin suggested buying to before Mike Solana/Pirate Wires posted?" Additionally, some community members discovered that Martin Shkreli was one of the first members of the DJT TG community, and the administrator came from Martin's previous project. To turn the tide, Martin Shkreli preemptively revealed his identity during a Space event on X.

Martin Shkreli is the co-founder of hedge fund MSMB Capital Management and the former CEO of Turing Pharmaceuticals, who gained notoriety in his teens for shorting several pharmaceutical companies for huge profits. In 2018, Martin Shkreli was arrested by the FBI for securities fraud and wire fraud and was sentenced to seven years in prison. Due to Martin Shkreli's actions of raising the price of a life-saving drug by over 55 times, he was labeled "the most hated man in America" by the BBC and was permanently banned from the pharmaceutical industry. Trump also described Martin Shkreli as "a spoiled brat, it's a disgrace."

Protests against Turing Pharmaceuticals for price gouging Source: AP

After being released early in May 2022, this "Pharma Bro" immediately shifted to Web3. Martin Shkreli founded a Web3 drug discovery startup called Druglike and completed a $3 million funding round. Consequently, the Federal Trade Commission (FTC) sued Martin Shkreli, but he claimed that the company is not a pharmaceutical company. Martin Shkreli has also been active in the crypto market, with his token Martin Shkreli Inu (MSI) experiencing a sharp decline after a massive sell-off, now down over 96% from its peak.

Martin Shkreli is also very active in the crypto space; he previously shared survival tips with SBF while in prison and revealed that he holds some cryptocurrencies and NFTs like Milady. Recently, he was sued by the crypto art collection platform PleasrDAO for replicating a previously confiscated album by the American hip-hop group Wu-Tang Clan, which is now being sold as a $1 NFT.

DJT Token Plummets, Insiders Cash Out

As the operators behind DJT were revealed, the DJT token began to plummet significantly. Data from Dex Screener shows that DJT's intraday decline reached nearly 66.7%, with its market cap reduced to about one-third of its peak.

Meanwhile, several insiders profited from the situation. According to Lookonchain monitoring, DJT's third-largest holder (possibly an insider) purchased 52.09 million DJT for 1,363 SOL (approximately $188,000) before the DJT rumors surfaced, earning about $1.04 million in SOL within just two days; another insider (a trader) spent only $9,400 to earn over $1 million, with returns increasing by 110 times; a major DJT holder, verso.sol, sold DJT tokens worth $832,000, and that address is also a major holder of Martin's other project Shoggoth.

In contrast, many investors suffered heavy losses. Lookonchain monitored that a trader spent 2,500 SOL (approximately $342,100) to purchase 91,705.6 DJT on June 18, but when selling, only recovered 4.91 SOL ($673), losing $341,400 in less than a minute, possibly due to a sandwich attack.

"I will be richer than before when I get out." Martin Shkreli once boasted in prison. Wherever the money is, Martin Shkreli will be there, and it seems that the crypto space is becoming a lucrative "new opportunity" for Martin Shkreli after his release.