Sandeep NailwalTHE Ethereum layer 2 network Polygon co-founder, expressed concerns that the growing trend of memecoin scams could attract regulatory scrutiny.
Nailwal highlighted these risks in a November 21 statement. job on X, highlighting recent incidents as potential triggers for government intervention in the crypto space.
QUANT controversy
Nailwal’s remarks were prompted by a scandal involving Gen Z Quant (QUANT), a memecoin launched on Solanaplatform based on Pompe.fun.
On November 20, the Lookonchain blockchain analysis platform reported that a 13-year-old created the token during a live-streamed event. The memecoin’s value jumped more than 260% in a matter of minutes before crashing when the boy sold all his holdings, earning $30,000.
The teenager’s actions don’t stop there. Shortly after the QUANT stack was removed, he deployed two more chips – LUCY and SORRY – and repeated the scam, winning another $24,000. These incidents fueled outrage, with affected traders accusing the boy of abusing Pump.fun for personal gain.
The backlash intensified when the boy taunted investors online. Some enraged traders retaliated by raising the price after the sale, doxxing his family and revealing personal information such as addresses and social media profiles. This led to further chaos, as new tokens themed around his family members began appearing on Pump.fun, making the situation darker.
Market implications
Industry leaders like Nailwal have warned that such incidents will tarnish the image of the crypto industry and could lead to stricter regulations. He noted that the lack of oversight in the memecoin sector is fueling speculative madness and exposing investors to significant risks.
Nailwal said:
“Things like this could prompt regulatory intervention on memecoin mania. This will result in a tectonic shift in the current industry narrative. This paints a terrible picture of crypto among the masses.
The current crypto market rally has fueled a wave of memecoin launches, often tied to trending topics or individuals. Many of these tokens lack utility or substantial community support and are subject to pump and dump schemes. Investors who enter these markets late often suffer significant losses.