A recent promotion by Coinbase’s Layer 2 network, Base, has led traders to pour millions into a memecoin, only to face devastating losses when it crashed in less than 24 hours. The incident has sparked widespread criticism, with many questioning the platform’s role in the fiasco.
Memecoin Hype Gets Traders Stung
On April 16, 2025, Base promoted a meme coin, which triggered a frenzy where traders invested heavily, driving a sharp price surge. Within hours, the coin collapsed, wiping out $15 million in minutes in what analysts called a textbook pump-and-dump scheme. The price chart showed a massive green candle of inflows followed by a red candle of equal size, confirming the rapid loss of liquidity.
The $15 million loss has eroded trust in Coinbase and its L2 network, with traders feeling misled by the promotion. On X, users expressed fury, with many accusing Base of reckless promotion. Some called for accountability, noting the lack of warnings about the coin’s risks. The backlash underscores a growing skepticism toward crypto platforms’ marketing tactics.
Notably, three crypto wallets reportedly bought the tokens ahead of the official announcement on X, profiting about $666,000. Blockchain sleuth Lookonchain uncovered the suspicious activity, which has raised concerns about potential insider trading activities.
Not an Isolated Case
The platform issued an official statement regarding the memecoin promotion incident, clarifying that the two memecoins they promoted, “Base is for everyone” and “Base @ FarCon 2025,” were not official brand tokens or related products. The statement was released earlier today, at 3:12 AM Beijing time, following the launch of the first memecoin on Zora, which reached a market value of up to $15 million before plummeting.
Meanwhile, market manipulations have become widespread, begging for regulatory attention. In a related event, OM, the native token of the real-world asset (RWA) platform MANTRA, crashed by over 90% in just one hour, erasing $6 billion in market value. MANTRA team denies allegations of a possible rug pull, stating that their tokens are secure and not involved in the crash amid investor losses.
In another case, Freddie Ng, a Binance Wallet BD employee, was suspended for accusations of insider trading with UUU tokens on the Binance Smart Chain. Freddie Ng realized a profit of $113k and an unrealized profit of $200k through trading the token. The situation has raised questions about the exchange’s internal controls and the potential for employees to exploit sensitive information for personal gain.
