SafeMoon CEO & Early Investors Who Engaged In Pump And Dump Scheme Now In A Class Action Lawsuit As Defendants
Seems like SafeMoon can never catch a break as its CEO, early investors and promoters may soon find themselves in court defending their honor.
A class action lawsuit has been filed against the creators of the ‘Safemoon’ coin, and those who promoted it, with names including Jake Paul, Lil Yachty, Soulja Boy and Nick Carter all listed in the filing. The suit alleges the ‘celebrities’ made false or misleading statements regarding the coin which led to over- investment and subsequent losses in a tale that is quickly becoming a classic in the cryptocurrency space.
The filing by Scott and Scott on behalf of Bill Merewhauder, Christopher Polite and Tim Viane names SafeMoon LLC as defendants, as well as a number of celebrities accused of promoting what the suit labels a ‘scheme’. Celebrity endorsements were used to artificially increase the price of the token, according to the suit, leading to investors buying in at unrealistically high prices.
The suit alleges that the original investors or owners then sold their coin at a profit in what is traditionally known as a ‘pump and dump’, leaving them far wealthier, but many investors left holding worthless coins they had massively overpaid for. The rise of the NFT movement and crypto itself has seen stories of this nature become far more common in recent months,
According to a Bloomberg report from the time, SafeMoon saw a more-than 19000% rise in value, which led to over 2m people investing in the coin, but even at that point concerns were being raised about the legitimacy of the token. The company is yet to respond to the lawsuit, but still has a verified account on twitter with over 1m followers, which could itself be seen as a tacit endorsement of the firm by the social media app.
Other crypto pump and dumps include the notorious Squid Game coin that netted one scammer more than $2m, as well as the SaveTheChildren scam that involved members of FaZe Clan. That was a black mark for the organization, for esports and for everyone involved, and eventually cost some of those involved their contracts with their orgs, as well as significant reputational damage to FaZe Kay and the others involved in the scam.