A report released by Groom Lake on Wednesday reveals that two unnamed market makers profited millions of dollars from the launch-day crash of Hunter Biden's LAPTOP meme coin on Coinbase's Base network following its September 9 release.
Disproportionate Liquidity and 98% Price Collapse
According to the investigation, LAPTOP's primary automated trading pool was setup with an extreme imbalance, holding $35,663 alongside 29,885 tokens. This structural flaw meant a purchase of just $6.02 pushed the price up by 5%, whereas driving the price down by 5% required $7,376 in selling volume. Across 668 other token launches evaluated in the report, buying and selling moved prices nearly equally.
The illiquid pool structure caused LAPTOP to surge from $0.05 to $316.75 in under two minutes, briefly implying a $300 billion market valuation across its 1 billion token supply. However, the two-minute peak immediately gave way to a 98% price drop within an hour. The sudden collapse comes amid heightened scrutiny on decentralized ecosystem infrastructure following recent security concerns such as a Base ecosystem vault incident.
Market Makers Net Millions as Liquidity Evaporates
While Biden stated the team hired two major market making firms to stabilize order flow, the report found their actions exacerbated the crash:
- Market Maker 1 received $500,000 in capital but placed only $5,244 into the main pool before withdrawing 84 seconds after the price peak.
- Available cash for sellers near market price collapsed from $16,158 to zero following the withdrawal.
- Market Maker 1 finished $685,873 ahead despite loan terms reserving certain fees for the lender.
- Decentralized exchange trading linked to Market Maker 2 generated $2.18 million in net profits.
Why It Matters
This incident highlights how fragile liquidity setups and opaque market-maker contracts leave retail decentralized exchange traders exposed to extreme slippage and predatory capital withdrawals. When liquidity providers pull capital during volatile price discovery, automated market makers experience severe illiquidity that prevents buyers from exiting positions. As celebrity and political meme coins continue to gain traction, the lack of mandatory disclosure rules for hired liquidity operators presents ongoing systemic risks for retail participants.
Addressing the findings in an October 7, 2026 post, Hunter Biden criticized the liquidity providers: "We hired two of the biggest market makers in the business to avoid exactly this, and we gave them the capital to stock both sides." He argued that the market maker responsible for failing the launch should buy back all tokens and burn them. Biden confirmed the founders' 300 million tokens remain locked for six months with a two-year linear vesting schedule, and stated the team plans to burn most unclaimed airdrop tokens next week.
