Solana (SOL) has suffered a major price decline, with its value decreasing as concerns over network congestion, fraud and security breaches have started to emerge. The previous reputation of the blockchain which was a benefit for high-speed distributed applications, has tired due to the influx of fraudulent website activities, which most recently have led to a series of meme coin scams.
These scams have shaken the confidence of investors and have caused a major backlash, affecting the price of the tokens on the blockchain.
Memecoin Mania turns to Chaos
Solana’s recent crash comes amid growing concerns around the role that Solana meme tokens play in rug pulls and scam tokens, affecting numerous investors. One shocking incident involved the Libra (LIBRA) token, heavily promoted by Argentina’s President Javier Milei.
Right from the point that the Libra was launched, insiders reportedly pulled $107 million in liquidity, causing a collapse of 94% of the prices for the token and resulting in nearly $4 billion worth of investor funds disappearing. This incident alone has sent shockwaves across the crypto community, further fueling scepticism around Solana’s memecoin ecosystem
North Korea’s Lazarus Group Linked to Solana Scams
Adding to all the chaos, an investigation into North Korea’s Lazarus Group has been carried out by blockchain investigator ZachXBT who has identified links between the prominent hacking group “Lazarus Group” and a string of memecoin scams using Solana’s Pump.fun platform, a Reddit-themed meme crypto platform.
The notorious hacking group has been suspected of orchestrating the loss of $1.4 billion worth from Bybit on February 21. This revelation has led to fear that Solana is becoming a platform for illegal activities and is now a target for regulators and investors to reconsider their exposure to the network.
Solana’s Price Plunge
Following these events, Solana’s price has plummeted, losing an extremely large amount of its market cap. The latest candlestick or price chart shows a dramatic price decline, with SOL losing from recent highs of $170+ down to below $160. The sell-off has suggested that investors are losing confidence in the ability of the blockchain to control the current wave of scams and congestion issues present.
As Solana has been a frontrunner in the memecoin boom of 2024, these setbacks raise serious concerns: Has the hype that had been rampant in the memecoin zone finally come to an end? With several issues flagged over network stability, regulatory risks being a high-risk factor among the spectrum of risks, as well as the increasing number of bad actors entering the ecosystem, Solana now faces an uphill battle to regain trust in the memecoin zone.
Read also: Stablecoin Bank Infini Suffers $49.5 Million Hack Days After Bybit Attack
