The reporter has observed that as the popular intellectual property (IP) “Labubu” of Pop Mart has gained global renown, a Memecoin named “Labubu” was recently introduced and listed on various virtual currency exchanges. On the day of its debut, the price of the “Labubu” meme coin soared sharply, but it was soon followed by a dramatic plunge, with the maximum decline reaching 91.66%.
This “Labubu” coin joins a growing list of tokens that have capitalized on popular culture and hot events. The “Doge King” token, which rose to fame due to a skit on China Central Television’s Spring Festival Gala; the “Two Uncle Coin” that emerged after the release of the anti – fraud film “One Bet on Nothing”; and the “Kota Coin” associated with the same film – all exemplify this trend. Such event – or culture – based virtual token issuance is a recurring pattern in the cryptocurrency sphere. The modus operandi typically involves rapidly inflating the token’s value in a short time, luring investors with marketing tied to hot events, and then witnessing a swift collapse in value until it becomes virtually worthless. In some cases, the perpetrators even abscond with the funds after making a profit.
Industry experts and legal professionals have issued repeated warnings: “Steer clear of such projects. Look beyond the allure of high returns to recognize the significant risks and the fraudulent nature of these ventures. Don’t let the fear of missing out (FOMO) cloud your judgment.” These projects generally hold no real value; the vast majority are “air coins” that simply ride on popular topics. At their core, they involve fraud, pyramid schemes, and market manipulation, which are all illegal activities. Domestic individuals are advised to abandon the idea of making huge profits through illegal virtual currency transactions and should enhance their risk awareness. Otherwise, they will have to bear the resulting losses themselves.
The Case of the “Labubu” Memecoin
“Labubu” can be considered a leading figure in the recent trend of collectible toys. As a trendy IP under Pop Mart, this uniquely – shaped “sprite” has won the hearts of fans worldwide. Unsurprisingly, it has also caught the attention of the cryptocurrency community. The “Labubu” virtual currency was launched recently and made its way onto several virtual currency exchanges. According to data from the cryptocurrency tracking platform CoinMarketCap, the “Labubu” coin was not issued by Pop Mart but by a group of community – driven developers. Despite its initial price surge on the launch day, it experienced a sharp decline two days later, as mentioned, with the maximum drop hitting 91.66%.
Yu Jianing, co – chair of the Blockchain Committee of the China Communications Industry Association, explained to the reporter that assets like the “Labubu” coin were not issued by the IP owner or any authorized entity. There is no substantial business, content, or brand connection with the original IP. Instead, these coins are mainly about quickly capitalizing on market sentiment, leveraging the popularity of “Labubu” among pop – culture consumers and its wide social reach to attract liquidity and create trading activity. In terms of motivation, these token projects are not based on product development, technical strategies, or financial service positioning. Instead, they focus on speculative demand, aiming for the capital flow generated by price fluctuations in the short term.
Precedents of Event – Driven Token Issuance
In fact, the practice of issuing virtual tokens based on hot events or popular culture is quite common in the cryptocurrency world. When the film “One Bet on Nothing”, which depicts the “Telecom Fraud in Myanmar” incident, was released, it became an instant hit. In the film, the character Gu Tianzhi, played by Wang Lantian, was defrauded by a telecommunications fraud gang and used 8 million yuan from selling his house to buy the virtual currency “Ketai Coin”, ultimately losing all his money.
The popularity of “One Bet on Nothing” drew significant attention to the “spending 8 million yuan to buy Ketai Coin” plot, presenting an apparent “business opportunity” to those in the cryptocurrency circle. A virtual token with the same name as the movie was launched during the movie’s preview, and its price skyrocketed initially, only to start declining within a few days. Reporters have noted that with the release of the film, multiple virtual tokens claiming to be “Ketai Coin” suddenly emerged, and there were individuals in the cryptocurrency community constantly promoting and selling these tokens in various groups.
As early as 2022, during the CCTV Spring Festival Gala, actor Shen Teng mentioned in his skit “Don’t Pay Back” that he was “playing with dogs” in the “metaverse”, which was then considered a relatively unexplored area. He referred to himself as the “Dog King” in the “metaverse”. Subsequently, a token named “Doge King” was launched. Its price spiked briefly before falling back, similar to the pattern of the “Kota Coin”.
After the short video “After Three Days in the Village, My Uncle Liu Cured My Mental Exhaustion” went viral on the internet, a virtual currency called “second uncle coin” also entered the public spotlight. It is known that the initiator of the “second uncle coin” established the “second uncle DAO” (distributed autonomous organization) and created the coin on the Binance Smart Chain to attract funds. The project team claimed that they would use blockchain technology to convey love and donate the raised funds to “Uncle Liu” for his retirement security.
Risks of Event – Driven Token Projects
After its launch, the “Second Uncle Coin” was highly speculated in the market, experiencing a short – term increase of over 100 times before crashing. The issuer was suspected of absconding with the funds. A Twitter account named “Who Cares News” once reported that “Security expert Iketrinia Rais tweeted that monitoring showed the recently popular Second Uncle Coin pool had suffered a Rugpull. The contract deployer had laundered the stolen funds through Tornado Cash. As of now, the price of the token SUC (Second Uncle Coin) has dropped by 99.7%. According to statistics, the total profit from this fraud incident amounted to 1.3 million US dollars.”
From its launch to the rapid rise and subsequent collapse, the “Second Uncle Coin” set the fastest collapse record in the cryptocurrency world within just a few days. Even more strangely, after the “Second Uncle Coin” crashed, new coin types such as “Daji Coin” and “Erji Mama Coin” emerged, all engaging in speculative hype.
Ju Qinyi, a partner at Beijing Weiheng (Shanghai) Law Firm, told reporters that the issuance of virtual currencies that capitalize on social hotspots is a typical form of speculation. The cost of such issuance is extremely low, and there is no credit guarantee. These tokens rely solely on the popularity of social topics to attract speculators, and their collapse is almost inevitable from the moment of issuance.
Xiao Sha, a senior partner at Beijing Dacheng Law Firm, stated that the phenomenon of issuing tokens based on hot topics has been prevalent since 2017 and continues to be common on various overseas platforms. It is a frequent type of crime in the virtual asset circle. For investors, the primary risks are the inability to obtain investment returns and the loss of the principal amount.
Meme coins, by their nature, are highly volatile. Their price fluctuations are often driven by market sentiment, speculation, and other factors, without any real – value support. Yu Jianing pointed out that project teams often manipulate price movements by locking in a small amount of liquidity and concentrating control over the initial token holdings. They cash out and exit after a short – term price spike, leaving those with limited understanding to bear the brunt of the losses. In other words, the price surges of meme coins usually occur within specific time frames and among a small group of holders, while the broader group of ordinary traders suffers when the prices fall.
From a legal and regulatory perspective, financial authorities have long made it clear that virtual currency transactions of this kind are illegal and may even involve financial crimes. As such, the general public in China should refrain from attempting to make huge profits through illegal means, strengthen their risk awareness, and be prepared to bear the consequences of any ill – advised investments, as advised by legal professionals. Yu Jianing also suggested avoiding token projects that simply follow trends. “Cryptocurrencies remain high – risk investment assets. The equity mechanisms and technological underpinnings of cryptocurrencies are significantly different from traditional investment assets. Before investing in cryptocurrencies, one should conduct comprehensive and in – depth research on blockchain technology, distributed business logic, and the digital financial system. Only in this way can one understand the true value of relevant cryptocurrencies and effectively manage investment risks.”
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