GameStop memecoin’s unofficial $4M token presale sparks investor controversy.

GameStop Memes (GMS), an unofficial project that seeks to capitalize on the success of the same Wall Street Memes (WSM) token, has raised $4 million from investors, according to a February 14 post from the project's official X account. But some investors say it's an endless pre-sale that takes away investors' crypto and gives them nothing in return.

An investor who wished to remain anonymous told Cointelegraph that they had never bought GMS tokens for $1,000 on the project's website. Instead, the developers told him that the tokens will be available only after the ongoing presale ends. In addition, the developers stated that they could not give the exact date when the pre-sale will end, saying that it will only end when all the tokens are sold. “The pre-sale is continuous and never-ending,” the investor said.

In an interview with Cointelegraph on Telegram, the GameStop Memes development team confirmed that the tokens will not be sent to investors until the pre-sale ends. The group declined to give a specific deadline for the presale, but said that if it fails to sell, “we plan to match the amount of the presale allocation.”

GameStop Memes does not appear to be affiliated with the official GameStop retailer trademark or the brand name of the retail stores. Cointelegraph reached out to GameStop for comment, but did not receive a response by the time of publication. On the memecoin website, the project falsely claims to be in partnership with Cointelegraph.

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GMS's advance raised $25 million

GameStop Memes is inspired and trying to replicate the success of an earlier project called Wall Street Memes, which raised over $25 million in pre-sales.

The history of Wall Street memes began in 2011. In 2019, members of the r/WallStreetBets subreddit opened an online store at Wallstmemes.com. The store featured T-shirts, mugs, baseball caps and other merchandise with a Wall Street theme. In January 2021, WallStreetBets gained notoriety by putting together a short squeeze on shares of electronics retailer GameStop. The short clip has brought new attention to the Wallstmemes.com website, which is linked to a Reddit group.

At that time, Wallstmemes.com had nothing to do with Web3 projects. But in May 2023, a group of developers created a memecoin project that wanted to capitalize on the website's success, Memes. Archived versions of Wallstmemes.com have been promoting this coin since October 3rd, indicating that the two groups are related or that the website was sold to the memecoin project team before October.

WSM's pre-sale offers “levels”. In the first stage, the pre-sale price was low, and it increased with each additional stage. The team announced that it would allocate 50% of the funds raised to the market, allowing it to generate demand for the coin as the presale moves into the later stages. On September 18, he announced that the presale had just seven days left and had raised more than $25 million. On September 26, the token was listed on the crypto exchange OKX.

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In the secondary market, WSM reached an all-time high of nearly $0.07 on September 30, 2023, according to CoinMarketCap data. At the time of publication, the price is $0.0082. The WSM development team recently launched a new version of the casino app and coin on the BNB smart chain, and says that owners of old tokens will soon be able to redeem for the new one.

Cointelegraph spoke to the Wall Street Memes development team to find out if it's connected to the new GameStop Memes token. In response, a WSM representative said, “We are a different project.

GMS says it wants to replicate WSM's success.

The GameStop Memes website launched in October. It features a similar background and user interface to the old Wall Street Memes site and lists pre-sales as being in “Phase 1”.

The site claims that GMS has “emerged from the heroic war that started Wall Street memes [and] Continuing his legacy, he will be a champion of the community to continue the fight.” He was “inspired by Wall Street Memes' successful start-up and all that he has accomplished in the crypto space,” according to the website.

GameStop Memes asks for partnerships, sends money to CEXs

On its site, GameStop Memes itself claims to partner with several crypto media publications, including Cointelegraph. As a disclaimer, Cointelegraph is not a partner of GameStop Memes.

Cointelegraph's news team connected the Ethereum wallet to the project's interface to find out what would happen if the user tried to buy the coin. Deposits in Ether (ETH) or Tether (USDT) are sent to an address ending in CE60f1. Blockchain data shows that if Tether is saved, the account often converts it to ETH. Meanwhile, information from Arkham Intelligence shows that the account makes regular deposits to the ChangeNOW crypto exchange.

The address transfers some funds to another address ending in 21b3B, which then sends it to various centralized exchanges, including Binance, Crypto.com, and Paribu.

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GameStop Memes hasn't distributed any tokens, but it says it will.

According to the project website, the token contract is located at 0xe7584C670BC5bb9F661DF3bA02Abb50b0612B2AA. Blockchain data shows that this contract was created on October 4, 2023. When created, a total supply of 1 billion GMs was sent to the deployment account. From the moment of publication, tokens are still stored in the distributor's account. No GMS has been distributed to investors since then.

In a Telegram chat with the Cointelegraph newsgroup, an administrator with the username “GameStopMemes” reiterated:

“The pre-sale is designed to end when the pre-sale allocation is reached. If we do not reach the pre-sale allocation amount, we plan to match the pre-sale allocation amount. In addition, the tokens purchased in the pre-sale will be received in the investor's wallet after the pre-sale ends, which means that the tokens are currently available online. – They are only visible on our website.

The administrator continued, “As for the utility of the token, we are aiming for more than just a memecoin. Our vision includes developing a protocol that adds tangible value, fosters a strong community, and creates a sustainable ecosystem around tokens. The administrator has not specified a specific date for the pre-sale to end.

Blockchain data shows investors continue to buy the coin, with the latest deposit on February 19. Although developers do not send the tokens to investors, they are not sold to the market as the entire supply remains in the distributor's account. .