ZachXBT rug pull drama reveals extent of unpaid detective work

Crypto detective ZachXBT found himself in the hot seat this week after he was accused of orchestrating a rug pull — the very scam he’s made a career out of exposing.

ZachXBT has built a reputation as a formidable investigator, exposing scammers and aiding government agencies in tracing multimillion-dollar frauds. His research was even cited by the United Nations Security Council in its report on the rising threat posed by North Korea’s crypto hackers.

Joining others in the crypto security community, ZachXBT has expressed mounting frustrations over the lack of financial incentives in his work.

So, when he removed the liquidity from a memecoin on Jan. 21, some cried out that he had orchestrated a rug pull.

ZachXBT rug pull drama explained

By definition, a rug pull involves developers or a project team abandoning a token by pulling liquidity or support. But in this case, the memecoin was a dubious venture from the start. It was an unsolicited gift from anonymous creators, seemingly designed to co-opt ZachXBT’s name for legitimacy.

ZachXBT, for his part, attributes the uproar to past grudges. He told Cointelegraph:

“The allegations mostly come from influencers I posted about previously for dumping on followers with tokens they were paid to promote.”

The alleged rug pull involved a memecoin supposedly launched to reward ZachXBT for his contributions. Here’s how it happened:

• Anonymous creators transferred half the token’s supply to ZachXBT. 

• He used it to add single-sided liquidity, which is when just one token type is deposited into a liquidity pool rather than a trading pair. 

• This pool accrued fees in Solana’s native SOL (SOL) token, which ZachXBT withdrew: first 340 SOL ($80,320), then another 15,771 SOL ($3.7 million).

Ultimately, 16,348.95 SOL, worth $4.3 million, was sent to trading firm Wintermute, while 96 million Justice for ZachXBT (ZACHXBT) tokens were redeposited into the liquidity pool.

The accusations against ZachXBT came at a surreal moment for crypto, as US President Donald Trump’s surprise memecoin launch briefly rose to the 15th position in global cryptocurrency market cap rankings.

Related: Fake TRUMP and MELANIA tokens record $4.8M inflows in 24 hours

As the president’s token skyrocketed, one X user said that ZachXBT would be the “busiest person in crypto” for the next four years, adding: “Hope u get paid well brother.” But the comment seemed to hit a nerve. ZachXBT responded with thinly veiled frustration, citing the lack of rewards for his services.

“One of my biggest regrets here is not prioritizing making money,” he replied.

Then came his own memecoin fiasco. “People claimed the token was created to support me, so I sold a portion of those tokens I was gifted,” ZachXBT told Cointelegraph.

In a world where reputations can turn on a dime (or a memecoin), ZachXBT’s decision to profit from the donations raised uncomfortable questions. Was this the righteous move of a frustrated investigator reclaiming his due or a lapse in judgment from a hero teetering on the edge of his pedestal?

“From my perspective, what Zach did is completely correct,” blockchain investigator SomaXBT told Cointelegraph. “They didn’t send him any pumped tokens like TRUMP or DOGE — they pumped that token using his name, and he simply took the profit.”

Still, some speculated that ZachXBT himself might be behind the token’s creation — a claim he denies.

“All I wish to clarify is I did not promote the coin to my followers at all anywhere and do not know who created the token.”

Vitalik Buterin gets gifts, too

Memecoins rarely serve a purpose beyond fueling degenerate gambling and rampant speculation. Lately, they’ve become a favorite plaything for celebrities and influencers eager to profit off their personal brands.

However, occasionally, memecoins are used to express gratitude toward influential crypto figures. Take Ethereum co-founder Vitalik Buterin, for example. His public wallet routinely receives unsolicited token donations. Some of them are seen as admirative expressions, while others are marketing stunts.

Buterin has stated that unsolicited token transfers to his wallets will be donated to charity. 

Concerns over ZachXBT’s retirement

ZachXBT’s recent social media activity has sparked concerns about whether the detective might be unplugging his sleuthing keyboard and cashing out after years of investigations.

Adding to the fatigue, his probes have also earned him enemies. His X account is closely monitored across the industry, and critics seem ready to strike at any perceived misstep.

“Scammers will always try to tarnish his reputation as revenge,” said Mikko Ohtamaa, founder of algorithmic trading firm Trading Strategy.

For now, ZachXBT remains active online. On Jan. 23, he shared a video exposing a scammer in action, and on Jan. 24, he took to Telegram to warn “newbie degens” of a rising trend where hackers target X accounts to promote fraudulent tokens.

He highlighted a shift in scammers’ focus from government and political accounts to celebrity profiles. Surprise announcements, he cautioned, are a key red flag. Ironically, the recent frenzy around the US president’s memecoin launch may have inadvertently legitimized future fake token schemes.

“Zach isn’t retiring with that $4 million. He’s still committed to working hard and adding value,” said SomaXBT.

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