May 16, 2023
(HOUSTON) — SafeMoon CEO and a list of celebrity endorsers for the cryptocurrency firm have been sued by investors for misrepresentation. A complaint filed in February cites the tech company and its ambassadors for fraudulent representation of SafeMoon’s crypto token and stakeholder ownership.The suit further alleges that SafeMoon company members ”disguised their control over SafeMoon and a significant percent of the SAFEMOON Tokens that were available for public trading during the Class Period (the “Float”).”
Along with SafeMoon CEO John Karony, the defendants include Backstreet Boys’ Nick Carter, rappers Lil’ Yachty and Soulja Boy, and boxer/social media personality Jake Paul. (According to court documents, Paul has reached an initial settlement agreement with the plaintiffs.)
According to the complaint, Gen Z entrepreneur Karony utilized the social media profiles of public figures like Paul and Carter to generate hype surrounding the SafeMoon coin. Karony also leveraged SafeMoon’s own Reddit profile to crowdfund for a high-profile billboard campaign, the suit alleges.The lawsuit, filed as a class action complaint on Feb. 17, is another example of the crypto sector being hauled into court. On March 22, the SEC announced charges against crypto entrepreneur Justin Sun “for orchestrating a scheme to pay celebrities to tout TRX and BTT [crypto coins] without disclosing their compensation.” Jake Paul and Lil Yachty and Lindsay Lohan were also charged for “illegally touting TRX and/or BTT without disclosing that they were compensated for doing so.”
The plaintiffs have requested a jury trial and are seeking compensatory and punitive damages to be determined by the court.
As of May 10, 2023 Coinbase noted the current price of one SAFEMOON token as $0.0000000065, far below the all-time high of $7.97 recorded shortly before allegations of fraud were filed.
SafeMoon CEO John Karony did not reply to a request for comment by The Click.