Unofficial GameStop memecoin’s $4M token presale draws investor controversy

The memecoin project wants to follow in the footsteps of the Wall Street Memes token, but it has allegedly yet to send coins to investors who have already paid.

GameStop Memes (GMS), an unofficial project seeking to capitalize on the success of the similar Wall Street Memes (WSM) token, has raised $4 million from investors, according to a Feb. 14 post from the project’s official X account. But some investors allege it is a never-ending presale that siphons away investors’ crypto and gives them nothing in return.

An investor who spoke on condition of anonymity told Cointelegraph that he never received GMS tokens despite having spent $1,000 purchasing them via the project’s website. Instead, the developers allegedly told him the tokens would only be delivered once the ongoing presale ended. In addition, he stated that the developers refused to give him an exact date as to when the presale would end, telling him that it would only end when all of the tokens were sold. “The presale is ongoing and never-ending,” the investor claimed.

In a conversation with Cointelegraph via Telegram, the GameStop Memes development team confirmed that the tokens will not be sent to investors until after the presale is over. The team declined to give a definite end date for the presale but did say that if it fails to sell out, “we have plans in place to match the amount of presale allocation.”

GameStop Memes does not appear to be associated with the official GameStop retailer’s trademark or its brand of retail stores. Cointelegraph reached out to GameStop for comments but did not receive a response by the time of publication. On the memecoin’s website, the project falsely claims to be partnered with Cointelegraph.

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GMS precursor raised $25 million

GameStop Memes is inspired by and attempts to replicate the success of an earlier project called Wall Street Memes, which raised more than $25 million over the course of its presale.

The story of Wall Street Memes began in 2019 when members of the r/WallStreetBets subreddit launched an online store at Wallstmemes.com. The store featured T-shirts, mugs, baseball caps and other merchandise with Wall Street-themed designs. In January 2021, WallStreetBets gained notoriety by orchestrating a short squeeze on shares of electronics retailer GameStop. The short squeeze brought fresh attention to the Wallstmemes.com website that was associated with the Reddit group.

At that time, Wallstmemes.com had no connection to any Web3 projects. But in May 2023, a group of developers created Wall Street Memes, a memecoin project that sought to capitalize on the website’s success. Archived versions of Wallstmemes.com show that it promoted this coin as early as Oct. 3, implying either that the two teams were associated with each other or that the website was sold to the memecoin project’s team before October.

The WSM presale featured “stages.” In the first stage, the presale price was lowest, and it increased with each additional stage. The team announced that it was allocating 50% of raised funds to marketing, allowing it to generate interest in the coin as the presale progressed to later stages. On Sept. 18, it announced that the presale had only seven days remaining and that over $25 million had been raised. On Sept. 26, the token was listed on crypto exchange OKX.

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On the secondary market, WSM reached a peak price of nearly $0.07 on Sept. 30, 2023, according to CoinMarketCap data. At the time of publication, it is worth $0.0082. The WSM development team recently launched a casino app and a new version of the coin on BNB Smart Chain, and it claims that holders of the old token will soon be able to redeem it for the new one.

Cointelegraph contacted the Wall Street Memes development team to determine if it is associated with the new GameStop Memes token. In response, a WSM representative stated, “We are solely a different project.”

GMS claims it wants to replicate WSM’s success

The GameStop Memes website was launched in October. It features a similar background and user interface as the earlier Wall Street Memes site and lists the presale as being in “Stage 1.”

The site claims that GMS “emerged from the heroic battle that Wall Street Memes started [and] will continue the legacy and become the champion of champions that the community needs to carry on the battle.” It was inspired by “the successful launch of Wall Street Memes and all that they accomplished in the crypto space,” the website states.

GameStop Memes claims partnerships, sends funds to CEXs

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

The Cointelegraph news team connected an Ethereum wallet to the project’s interface to determine what happens if a user attempts to buy the coin. Deposits in Ether (ETH) or Tether (USDT) were sent to an address ending in CE60f1. If Tether is deposited, the account often swaps it for ETH, as blockchain data shows. Meanwhile, data from Arkham Intelligence shows that the account periodically makes deposits to the ChangeNOW crypto exchange.

The address also transfers some funds to another address ending in 21b3B, which subsequently sends them to a variety of centralized exchanges, including Binance, Crypto.com and Paribu.

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GameStop Memes hasn’t distributed any tokens, but claims it will

According to the project’s website, the token’s contract is located at 0xe7584C670BC5bb9F661DF3bA02Abb50b0612B2AA. Blockchain data shows that this contract was created on Oct. 4, 2023. At creation, the total supply of 1 billion GMS was sent to the deployer account. As of the time of publication, the tokens still sit in the deployer account. No GMS has been since distributed to investors.

In a Telegram chat with the Cointelegraph news team, an admin with the username “GameStopMemes” reiterated:

“The presale is designed to end upon reaching the presale allocation. If we don’t reach the amount for presale allocation, we have plans in place in order to match the amount of the presale allocation. Additionally, the tokens purchased in the presale will be received in the investor’s wallet after the presale ends, which means that the tokens are only visible on our website at the moment.”

The admin continued, “Regarding the utility of the token, we’re aiming for more than just a memecoin. Our vision includes developing a protocol that adds tangible value, fostering a strong community, and creating a sustainable ecosystem around the token.” The admin did not state a specific date upon which the presale will end.

Blockchain data shows that investors continue to purchase the coin, with the latest deposit occurring on Feb. 19. Although developers have not sent the tokens to investors, they have also not sold them into the market, as the total supply remains in the deployer account.