The star token craze seems to be the hottest topic of the week. The newly launched memecoins have been criticized by members of the cryptocurrency community as their launch sparked huge controversy.
After about a week of pumping and dumping, the U.S. Securities and Exchange Commission (SEC) issued a warning to investors. However, the SEC’s warning didn’t stop more musicians from joining the cryptocurrency festival in the second quarter.
SEC warns against celebrity memecoins
On Wednesday, the US SEC published an investor alert regarding memecoins. In the alert, the Commission warned users about pump-and-dump and pre-sale schemes involving meme-based tokens.
The SEC explained that “fraudsters can create memecoin and then advertise it on social media.” After bidding up the price and selling to make a profit, investors see most of their money gone as the price plummets.
The celebrity memecoin launch craze became a trend last week. As a result, many mainstream media figures, influencers, musicians, and athletes have shown “interest” in the crypto space.
In most cases, these stars start reaching out to the cryptocurrency community just before promoting their soon-to-be-launched memecoins. However, the recent trend was particularly controversial because most of the data involved an alleged serial cheater.
Recently, celebrities and community members accused one Sahil Arora of allegedly orchestrating several pump and dump scams. Arora apparently defrauded investors and partners with every Memecoin launch he participated in.
Australian rapper Iggy Azalea launched MOTHER two days ago and claimed to have created a token to stop Arora from using her image in his scams. Moreover, Rich the Kid and Caitlyn Jenner stated that the alleged cheater lied to them.
Now more musicians have joined the memecoin crypto festival, accusing them of abandoning their fans.
More music artists headline Memecoinchella
On Wednesday, crypto detective ZachXBT accused eminent rapper Lil Pump of engaging in a pump-and-dump scam. According to an internet investigator, the rapper shared and quickly deleted a post promoting his memecoin after the token was dropped.
The post said “lil or big pompa” and tagged one of Arora’s accounts. Lil Pump responded to the allegations, claiming that he never donated any token and accusing Arora of defrauding him and his fans. Moreover, he apparently sent “evidence” to a crypto detective to prove his innocence.
In the early morning hours of Thursday, the rapper claimed that he had taken control of his accounts and Memecoin. Moreover, he distanced himself from the alleged serial cheater. However, ZachXBT common a few screenshots of a conversation between Lil Pump’s team and the person managing the memecoin launch.
The photos show that Pump’s team was unaware of Aora’s achievements, but as the investigator explained, “he still received partial payment for the fraud.” Additionally, his team hid the paid promotional tag, which is a requirement for X. ZachXBT pointed out that the rapper did the same in 2022 as well.
Throughout the night, the internet sleuth named several other artists who have joined the cryptocurrency scam headlines. The list includes American rapper MoneyBagg Yo, Trippie Redd and Davido.
Providing a platform to fraudsters
American-Nigerian singer and producer Davido headlined Wednesday night alongside Lil Pump. The singer promoted his Davido token alongside characters in the crypto space.
Cryptocurrency trader Ansem had an X Space session with a music producer to discuss his project. According to internet reports, the singer abandoned more than half of his shares in DAVIDO during the X session.
Lookonchain revealed that Davido earned over 2,783 SOL worth approximately 473,000 after selling 121.8 million DAVIDO tokens. For the post, the singer received 7.5 SOL as starting capital, with which he bought 20.3% of the total memecoin supply.
The community was not ecstatic with the cryptocurrency trader’s involvement in the incident. As a result, several community members sparked an significant discussion. Many people have pointed out that platformers, celebrities or not, who seem to have no interest in space at all, are predatory and unsafe.
How indicated by ZachXBT “running a space gives them credibility” and gives “celebrities a platform to do this to others again and again.”
Featured image from Unsplash.com, chart from TradingView.com
