30 May 2024
The celebrity token frenzy seems to be the hottest topic of the week. The newly launched memecoins have been criticized by crypto community members as the tokens have been launched with massive controversy.
After a week or so of pumping and dumping, the US Securities and Exchange Commission (SEC) issued an Investor Alert. However, the SEC’s warning didn’t stop more musicians from joining the crypto festival of Q2.
SEC Warns About Celebrity Memecoins
On Wednesday, the US SEC released an Investor Alert targeting memecoins. In the warning, the Commission alerted users about pump-and-dump and pre-sale schemes involving meme-based tokens.
The SEC explained that “fraudsters may create a memecoin and then tout it on social media.” After pumping the price and selling to make a profit, investors see most of their money gone as the price rapidly decreases.
The celebrity memecoins launch frenzy became a trend this past week. As a result, many mainstream media figures, influencers, musicians, and athletes have shown “interest” in the crypto space.
In most cases, these celebrities start engaging with the crypto community right before promoting their soon-to-be-launched memecoins. Nonetheless, the recent trend has been particularly controversial since these figures have, for the most part, worked with an alleged serial scammer.
Recently, celebrities and community members accused a man named Sahil Arora of allegedly orchestrating several pump-and-dump scams. Arora seemingly scammed investors and partners in every memecoin launch he’s been involved with.
Australian rapper Iggy Azalea launched MOTHER two days ago and claimed to have created the token to stop Arora from using her image on his scams. Moreover, Rich the Kid and Caitlyn Jenner have come out stating that the alleged scammer lied to them.
Now, more musicians have joined the crypto festival of memecoins while being accused of dumping their fans.
More Musical Acts To Headline Memecoinchella
On Wednesday, crypto sleuth ZachXBT accused famous rapper Lil Pump of participating in a pump-and-dump scam. According to the internet investigator, the rapper shared and quickly deleted a post promoting his memecoin after the token was dumped.
The post stated “lil or big pump” and tagged one of Arora’s accounts. Lil Pump answered the allegations, claiming to never have made a token and accusing Arora of scamming him and his fans. Moreover, he seemingly sent “proof” to the crypto detective to prove his innocence.
In the early hours of Thursday, the rapper claimed to have taken control of his accounts and the memecoin. Moreover, he distanced himself from the alleged serial scammer. However, ZachXBT shared some screenshots of a conversation between Lil Pump’s team and the person managing the memecoin launch.
According to the images, Pump’s team was not aware of Arora’s track record, but as the investigator explained, he “still got partially paid for the scam.” Additionally, his team hid the paid promo tag, which is an X requirement. ZachXBT pointed out that the rapper also did the same in 2022.
Throughout the night, the internet sleuth listed several other artists who joined the crypto scam headlines. The list includes American rapper MoneyBagg Yo, Trippie Redd, and Davido.
Giving A Platform To Scammers
American-Nigerian singer and producer Davido was, alongside Lil Pump, the biggest topic on Wednesday night. The singer promoted his Davido token alongside figures inside the crypto space.
Crypto trader Ansem held an X Space session with the music producer to discuss his project. According to online reports, the singer dumped over half of his DAVIDO holdings while on the X session.
Lookonchain revealed that Davido made over 2,783 SOL, worth around 473,000, after selling 121.8 million DAVIDO tokens. Per the post, the singer received 7.5 SOL as start-up capital, which he used to buy 20.3% of the memecoin’s total supply.
The community wasn’t pleased with the crypto trader’s involvement in the incident. As a result, an important discussion was brought up by several community members. Many pointed out that platforming individuals, celebrity or not, who seemingly have no real interest in the space is predatory and dangerous.
As pointed out by ZachXBT, “leading the spaces provides credibility to them” and gives “celebs the platform to do this to people repeatedly.”