SafeMoon (SFM-USD) is a hot topic across the crypto space today, and not for good reason. Rather, a SafeMoon class-action lawsuit is being levied by holders who say the project duped them. Nearly one full year into the project’s existence, SafeMoon is now faced with more adversity than ever before, and investors are interested to see how the crypto fairs.
Since its founding in March 2021, SafeMoon has been a polarizing altcoin. Scam allegations have followed the project from some of its earliest moments. Even with its V2 rebrand, which retired the SAFEMOON token and launched the SFM crypto, its price has been rocky.
And now, SafeMoon is facing further reckoning.
The new lawsuit against the project questions developers over their relationships with celebrity spokespeople. Here’s what you need to know.
SafeMoon Class Action Lawsuit Clouds Celebrity Endorsements
- The SafeMoon class-action lawsuit was filed just last week, on Feb. 17.
- The suit targets SafeMoon LLC and its various executives such as founder and CEO John Karony. However, it also targets YouTubers Jake Paul and Ben Phillips, as well as musicians Soulja Boy, Nick Carter and Lil Yachty.
- These celebrities all tweeted various promotions of SafeMoon at one point or another. These tweets also typically preceded gains in SAFEMOON’s value.
- These tweets, the suit alleges, are misleading promotions about how much a SafeMoon investment can actually yield. As such, the suit asserts that the project is a Ponzi scheme.
- Allegedly, these celebrities then completed a “slow rug pull,” effectively slowly selling off their assets over time so as not to alert the victims of the scam.
- Complaints in the lawsuit don’t limit themselves to just celebrity endorsements. Plaintiffs also chastise SafeMoon’s tactic of making guides that advise investors to buy and hold, and discouraging selling.
- They also target the tokenomics on which SafeMoon is built for being unfair to holders. The suit says the selling penalties are “a system that penalizes buyers for anything but holding their tokens.”
- As these accusations surface, SFM is seeing a downturn in price. As of this afternoon, SFM is losing over 6%. Trading volume, however, is trending up by nearly 12%.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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