SafeMoon LLC and some “celebrity promoters” are being sued by a group of plaintiffs for participating in a pump-and-dump operation involving SafeMoon tokens. The new class action seeks a jury trial for celebrities and social influencers of which Jake Paul, Nick Carter, and others have been accused.
SafeMoon, a Binance Smart Chain-native cryptocurrency, is accused of enlisting the help of a number of celebrities to entice investors with deceptive marketing. Nick Carter, Soulja Boy, Lil Yachty, and YouTubers Jake Paul and Ben Phillips are among the celebrities named in the class-action lawsuit.
SafeMoon and its subsidiaries, according to the lawsuit, imitated real-life Ponzi schemes by deceiving investors into purchasing SafeMoon tokens under the guise of unachievable earnings.
About the lawsuit
The accused celebrities allegedly persuaded their fans to buy in SafeMoon by citing the ecosystem’s ‘burn’ and ‘tokenomics’ as significant drivers for the token’s price potential.
Furthermore, the lawsuit cites multiple occasions in which the hired celebrities were effective in artificially inflating the token’s trading volume and price.
While SafeMoon experienced multifold growth over several months, the sudden departure of the company’s C-suite executives coincided with a drop in token values, as shown in the graph below (marked in yellow):
The lawsuit claims that the celebrities engaged attempted a “slow rug pull,” meaning a gradual sell-off of shares while trading volume from normal investors remains inflated:
“The Promoter Defendants’ improper promotional activities generated the trading volume needed for all the Defendants to offload their SAFEMOON Tokens onto unsuspecting investors.”
The lawsuit seeks to represent and recompense anyone who purchased SafeMoon tokens from March 8, 2021, and were victims of the alleged rug-pulling attempt.
Binance’s Super Bowl crypto advert
The crypto advertisements were one of the main attractions of Super Bowl 2022. In the midst of the media frenzy surrounding the ads, crypto exchange Binance started a marketing effort to caution investors about the impending crypto euphoria fed by mainstream celebrities.
Binance’s ultimate goal with this campaign was to drive new users to its platform as well as to its website’s instructional crypto primer products.