Celebrities Jake Paul, Soulja Boy, and Nick Carter, among others, are being sued for being involved in the SafeMoon crypto scheme.
Claims say that the hired stars made “false or misleading statements” to encourage fans to invest in the digital coin.
SafeMoon LLC, the company behind the $SAFEMOON Token, is facing a lawsuit along with several celebrity promoters and social media stars for allegedly misleadingly promoting and selling a fake scheme.
The company is being accused of collaborating with the celebrities and others to make the investment look legitimate and to attract investors on social media, while “disguising their control” over the tokens being sold.
Jake Paul, Others In Trouble
Such a scheme is widely known as “pump and dump,” which is a criminal offense intended to boost a stock’s or security’s price based on false, misleading, or greatly exaggerated statements by known figures.
The plaintiffs have duly requested a trial by jury, bringing the class action lawsuit on behalf of themselves and everyone who had purchased the tokens from March of last year up to yesterday.
The lawsuit states that Jake Paul and Soulja Boy were liable for being involved in a scheme which has “gradual sell-off of holdings while trading volume from normal investors remains overvalued.”
BTC total market cap at $1.682 trillion in the daily chart | Source: TradingView.com
“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 claims.
Reports have speculated that SafeMoon founder and CEO Braden John Karony and the company’s other top executives have launched the digital token with the intention of eventually selling their holdings for a profit when the numbers reach a certain peak.
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Economic Harm
As the blockchain industry gains unstoppable momentum, crypto exchange firm Binance has not lacked in warning the public about the risk of investing in impending crypto mostly hyped by mainstream stars.
The lawsuit was filed in California’s Central District Court, February 17.
The filing implies that everyone who bought SafeMoon tokens from last year have suffered economic harm because of the ‘losing investments.’
“On December 31, 2021, the price of the SafeMoon Token hit a low of $0.0000006521 per token, an over 80% drop from its height during the Class Period, which it has not been able to recover,” it said.
Nonetheless, the digital tokens’ developers have reassured the public that SafeMoon was legitimate and that it has moved to a second-version of the token last January.
As of writing, neither the company nor the celebrities have responded to the legal claims against them.
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Featured image from Dexerto, chart from TradingView.com
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