Solana Treasury Firm Blames Sniper for Suspicious Meme Coin Trades

Publicly traded Solana treasury firm DeFi Development Corp. (DFDV) launched its own meme coin on Thursday—and soon became the subject of insider trading allegations on social media. 

A trader, identified by the firm as an “early sniper”—or someone who systematically purchases newly launched tokens—bought $4,000 of the firm’s DisclaimerCoin (DONT) meme coin prior to the firm’s public launch announcement. That stash was quickly worth over $1 million after DeFi Development Corp. started promoting the token rollout and the price of DONT surged.

The trader in question, using a Solana address ending in “8FziB,” began purchasing the DONT meme coin around 7:39 a.m. ET on Thursday, about 25 minutes after it was created on token launchpad Bonk.fun, according to blockchain data from Solana block explorer Solscan.

The account ultimately purchased around 29 billion DONT tokens across multiple transactions, spending just over $4,000 and ending up with nearly 7% of the total supply of 420 billion tokens by 8:39 a.m. ET. 

The trader started purchasing tokens at miniscule market caps nearly an hour before the Solana firm—which holds more than 2.2 million SOL, or around $283 million worth—publicly announced that it had launched the DONT meme coin, around 8:30 a.m. ET.

The firm’s press release published to GlobeNewswire was timestamped at 8:30 a.m. ET, and emails about the release were received by Decrypt at 8:39 a.m. ET. DeFi Development Corp. announced the token launch to its 15,900 X followers at 8:33 a.m. ET, nearly an hour after “8FziB” started purchasing the token in large quantities.

Following the announcement that the token—branded as an experiment—was launched by the firm, DONT quickly jumped, reaching a $16.5 million market cap around an hour after the public announcement, creating sizable profits for the alleged sniper. 

As the price rapidly climbed, the “8FziB” wallet holder started selling part of their position, ultimately netting more than $200,000 in realized gains as its balance declined to around 17.4 billion DONT tokens.

On the surface, the trades might point to a huge victory for a lucky meme coin trader—someone who took a stab on a random token and was handsomely rewarded. But crypto sleuths saw potential red flags in the blockchain data.

Hours after the launch, on-chain observers alleged potential wrongdoing, pointing to a connection between the sniper’s wallet and another Solana address that holds DFDV’s liquid staking token. 

“Fascinating behavior, the address that funded the profitable trader [...] holds $30K of DeFi Dev Corp's liquid staking token (LST),” Ian Unsworth, the co-founder of crypto research firm Kairos Research, posted on X. Further, the wallet that funded the funding wallet of the alleged sniper also has early connections to the DeFi Dev Corp’s validator—an account on the Solana network that stakes SOL, helping to secure the blockchain and earning rewards.

Using blockchain data, Decrypt was able to independently verify the claim, and on-chain research firm Bubblemaps confirmed Decrypt’s findings. 

As the allegations reached DFDV, the firm said it conducted a review of the launch, and ultimately determined the address in question (8FziB) belonged to an early sniper and did not comment on allegations of connections between the company and the alleged sniper. 

“Allegations of an early sniper came to our attention a few hours ago. We conducted a swift and thorough review and identified the sniper,” the firm posted on X. “We are unwavering in our commitment to the highest standards of integrity, not only throughout this experiment, but in all future endeavors. Our dedication to transparency and ethical rigor will remain a guiding principle for years to come.” 

The proceeds earned from the sniper’s sales, about $200,000 worth of Solana, was then returned to a wallet belonging to the DeFi Dev Corp team in addition to more than 17 billion DONT tokens, about $1.5 million worth. Those tokens were subsequently burned—that is, sent to a blockchain address where they can not be accessed, effectively removing the tokens from circulation. The company did not comment on how it was able to retrieve the tokens from the alleged sniper or if the trader is known to the company.

Following the announcement that the firm had burned the tokens, DONT jumped around 92% in an hour to $35 million market cap—which is 19% of the company’s own $190 million market cap based on the price of DFDV stock.

A representative for the firm did not respond to Decrypt’s request for details on any protocols put in place by DFDV to avoid information leaks, or why the firm suspected that the sniper invested in the DONT token, instead pointing Decrypt to the firm’s statement on X.

Shares in the firm are down around 2.33% on Thursday and down 73% in the last six months, now changing hands around $6.29.