SafeMoon promoters sued for ‘pump and dump’ class action

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Investors filed a class-action lawsuit against celebrities who promoted the DeFi SafeMoon project, accusing them of purposefully pumping the asset.

SafeMoon investors Bill Merewhuader, Christopher Polite and Tim Viane filed a lawsuit in California’s Central District Court. The defendants are American musician Nick Carter, rapper Soulja Boy, hip-hop artist Lil Yachty, and YouTuber Ben Philips and Jake Paul. The plaintiffs allege that these people encouraged users to buy the SafeMoon cryptocurrency by advertising it on social media. Celebrities promised potential investors large profits, thereby misleading them, the authors of the statement assure. The ad stated that the SafeMoon token burn would be a key factor that would drive the price further.

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The investors who filed the lawsuit bought SafeMoon tokens in March 2021. After being advertised by celebrities, within a few months, her course really recorded a noticeable increase. On April 20, the volume of trading in this token amounted to more than $144 million in fiat currency, and the cost of one token reached a maximum of $0.000011. Investors noted that the rate of SafeMoon increased by 2,749,900%, since at the time of launch the token was trading at $0.0000000004.

However, on December 31, 2021, the SafeMoon rate fell to $0.0000006521, falling by 80% from its all-time high for the specified period, and trading volume decreased to $60,000.

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According to the plaintiffs, the promoters promoted the token using a “pump and dump” scheme for personal gain. They began to sell off the crypto asset at a time when unsuspecting users continued to invest in it. Since the plaintiffs have suffered financial losses, they seek compensation for their losses.

According to Morning Consult, 45% of investors surveyed are willing to purchase digital assets touted by influencers. US regulators are concerned that famous people can easily manipulate cryptocurrencies even with a simple tweet, so celebrities are often fined for this. So, in 2018, the US Securities and Exchange Commission (SEC) fined boxer Floyd Mayweather and producer DJ Khaled for promoting a fraudulent ICO.

Source: Bits

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