The Trap Revealed: How One Meme Coin Scam Landed a Student 4.5 Years Behind Bars—And What You Must Know to Survive

The crypto world just witnessed a cautionary tale that should terrify every trader. A post-2000 student named Yang Qichao launched a meme coin called BFF, and within 24 seconds of listing, the project turned into a complete wipeout. One investor who committed 50,000 USDT walked away with just 21.6 USDT. Yang Qichao received a 4.5-year prison sentence in his initial trial, and despite appeals in May 2024, the verdict remains largely intact. This is not just drama—it’s the most painful truth about what happens when greed meets criminal negligence in the meme coin space. This case is a trap for many reasons, and understanding why matters more than you think.

The Anatomy of a Trap: What Actually Happened

The Setup and the Strike

Here’s exactly how the game played out: The BFF meme coin hit the market with liquidity added. Seconds later, buyers rushed in. Immediately after, the developer yanked the liquidity pool dry. The token’s value crashed to zero in an instant. This textbook move is what the community calls “rug pulling” or “flash harvesting”—essentially, it’s a trap disguised as a legitimate trading opportunity.

The Devastation

The numbers speak for themselves: 50,000 USDT → 21.6 USDT. That’s not a market downturn. That’s predatory harvesting. That’s the difference between losing money and being robbed.

Why the Legal System Got Involved

Here’s where this case gets interesting. The first-instance court slapped Yang Qichao with a fraud conviction. But during the appeal, the defense made a bold argument: “The platform technically allows liquidity withdrawals. The contract code is real and unaltered. Everyone who participated knew they were taking a risk.”

This argument exposed the bleeding edge of crypto law: Where exactly is the line between “market risk you accept” and “outright criminal fraud”? The community remains divided, but the law has now spoken—and it says: there is a line, and Yang Qichao crossed it.

Three Critical Truths Every Trader Must Internalize

Truth #1: “The Platform Allows It” ≠ “It’s Legal”

Just because a DEX or blockchain permits an action doesn’t make it lawful. The moment there is clear intent to deceive and measurable harm to investors, criminal law steps in—full stop. The code doesn’t care about legality; the courts do.

Truth #2: On-Chain Transparency Is Not a Get-Out-of-Jail Card

A verifiable contract address and immutable transaction history look legitimate, but they don’t erase criminal intent. If you design a trap—even a technically perfect one—with the goal of harvesting other people’s money, you’ve committed fraud. The transparency of the blockchain is irrelevant to your state of mind.

Truth #3: “Everyone Knew the Risk” Doesn’t Excuse Exploitation

Yes, crypto investors accept risk. No, that doesn’t mean predators can hunt them freely. Criminal law protects property rights universally. Risk-bearing is not consent to be robbed. This is the hard boundary, and it applies to retail traders and institutional players alike.

The Trap Recognition Playbook: Red Flags That Scream “Run”

Learning to spot a trap before it springs is your best defense. Here are the warning signs:

Liquidity Left Unlocked

The most basic trap setup: liquidity added to the pool but not locked. Developers can withdraw it whenever they want, which means collapse is one click away. Any project where liquidity can vanish at will is a landmine.

Unlimited Developer Power

Check the contract permissions. Can the dev mint new tokens? Can they modify transaction taxes? If they hold these backdoor powers, they’re holding a loaded gun aimed at your wallet. Serious projects renounce these permissions; traps never do.

Name Hijacking

Some projects deliberately mimic the names or branding of established coins or DAOs—Solana clones, Ethereum copycats, fake DAO tokens. The names look familiar, but the contract code and holding addresses are completely different. It’s identity theft packaged as a token.

Hype Without Substance

Marketing that rivals major projects, but when you dig into team details, audit reports, and whitepapers? Nothing. Radio silence. Empty promises. These projects exist to pump fast and dump faster. The hype is the entire product.

Controlled Volatility Patterns

New tokens with K-lines that look suspiciously manipulated—volumes concentrated at specific times, price movements that defy normal market logic, wild swings with no corresponding news. These are the fingerprints of pump-and-dump schemes where large holders are orchestrating the moves.

If You Step on the Landmine: Your Damage Control Playbook

Document Everything, Leave No Gap

Transaction hashes, screenshots of K-line charts, contract code snapshots from the moment you bought, community announcements, chat records—every single piece of evidence. The more complete your documentation, the stronger your case.

Use Multiple Channels Simultaneously

Don’t put all your faith in one avenue. File reports with local law enforcement, submit complaints to the exchange, and simultaneously engage third-party evidence preservation services or notaries to create an official record. Diversify your legal strategy.

Avoid Informal “Victim Groups”

The crypto community often rallies around victims, which is admirable, but informal rights-protection groups can become traps themselves—secondary schemes where someone “helps” you recover funds for a cut. Stick to official channels and verified legal processes.

Cooperate Fully With Authorities

If your transaction history or fund sources come under scrutiny, explain proactively. Cooperation speeds up investigations and keeps you out of unnecessary legal trouble. Transparency with authorities is not weakness; it’s wisdom.

The Bigger Picture: The “Wild West” Era Is Over

This case marks a turning point. Regulators are tightening the noose. The days when the crypto space was a lawless frontier where anything could fly are finished. Whether you’re building a project or trading in one, the rules now have teeth.

For developers: Cutting corners and designing traps will land you in prison. For traders: Due diligence is no longer optional—it’s survival.

The bottom line is harsh but clear: No matter how clever your trap design or how large your intended harvest, if you cross the criminal law threshold, you will pay. Yang Qichao did. And he won’t be the last.

The question for everyone in this space is simple: Are you going to learn from his mistake, or will you become the next cautionary tale?