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News/Celebrity Tokens Stir Crypto Market Amid Controversies and 'Market Top Signals' Concerns

Celebrity Tokens Stir Crypto Market Amid Controversies and 'Market Top Signals' Concerns

Van Thanh Le

May 30 2024

3 weeks ago3 minutes read
mosaic robot, crypto swirls, celebrity JENNER token debates

Jenner's Memecoin Mayhem: A Tangled Tale of Hacks, Scams, and Crypto Chaos

Skepticism swirled when Caitlyn Jenner's JENNER token burst onto the Solana blockchain on May 26. Announced via her X (formerly Twitter) and Instagram accounts, the token's debut saw market participants questioning the legitimacy, fearing her accounts had been hacked due to the history of celebrity compromises promoting crypto tokens.

Despite doubts, JENNER token initially surged, generating over $113 million in trading volume within four hours and reaching a market capitalization of $43 million within the first 24 hours. 

dexscreener.com_jenner_SOL_2024-05-29_22-38-55.png
Source: Dexscreener

Jenner and her manager, Sophia Hutchins, confirmed the token’s legitimacy through videos, dismissing hack rumors. Jenner expressed excitement, encouraging participation, while Hutchins assured followers of her managerial role. However, skepticism lingered, with some dismissing the videos as deepfakes.

The crypto community was split; some saw potential, while others suspected a scam. Concerns grew when Jenner’s wallet activity linked to previous celebrity hacks, including tokens like ZUMI. Influencer Roxo identified Sahil Arora as a key figure behind the JENNER token, accusing him of socially engineering Jenner’s team and dumping tokens from the deployer wallet.

American rapper Rich The Kid also became embroiled, promoting a token called RICH on pump.fun, later claiming Arora had hacked his account. Roger accused Arora of a pump-and-dump scheme, alleging profits were funneled to Arora’s account before blocking him.

Jenner eventually confirmed her accounts were hacked, accusing Arora of scamming her to promote the JENNER token. Despite the hack, Jenner pledged continued support for the token, asserting its potential value remained intact.

According to Roxo, Caitlyn Jenner's team was confused by the launch of JENNER coin, which she promoted on X. A tweet on Jenner's X account urging followers to send memecoins to an address identified as Arora's has since been deleted. Jenner claimed the ad for a third-party token was taken down and she is fully focused on her own JENNER token. Arora, however, accused Jenner of abandoning him and threatening him to leave X.

Celebrity Memecoins Shake Up the Crypto Market

Caitlyn Jenner's memecoin, JENNER, launched on Solana through Pump.fun, has seen a whirlwind of activity over the past four days. Then, the Ethereum version of JENNER, promising to funnel a 3% transaction tax to the Trump campaign upon hitting a $50 million market cap (now sitting below $2 million), adds to the intrigue. The JENNER token on Solana soared to a $43.6 million market cap but has since plummeted by over 85% to $6.2 million. Notably, 14,000 Solana addresses hold JENNER, compared to fewer than 2,000 for its Ethereum counterpart.

Iggy Azalea also jumped into the memecoin craze with MOTHER, only to find herself in a controversy. Azalea accused promoter Sahil Arora of deceiving her with dubious token schemes. Despite this, MOTHER saw a staggering 22,000% price surge, hitting a market cap of over $15 million. 

Allegations of insider trading surfaced, with some traders acquiring 20% of MOTHER's supply pre-launch, reaping massive profits. Azalea distanced herself from Arora, emphasizing her independent launch of MOTHER. The token, however, has faced skepticism and criticism within the crypto community.

Meanwhile, Sahil Arora's reputation took a hit with allegations of scamming investors. He reportedly amassed $380,000 in presale funds for a fraudulent Iggy Azalea token, IGGY, which collapsed from a $1.35 million market cap to just $55,000 following Azalea's denouncement. Arora's promises of returns failed to materialize, leaving investors in the lurch.

Nigerian musician Davido's memecoin, DAVIDO, launched on Solana, quickly generated significant profits as Solana's official X account published a welcome message for him. Davido earned half a million dollars within minutes and sold 20.3% of the token supply for a profit of 2,791 SOL, roughly $474.4 million. He retains 43.25 million DAVIDO tokens, representing 4.32% of the total supply. 

Despite all the backlash after this incident, Solana is currently “outpacing” Ethereum, with Glassnode cofounder Yann Allemann noting Solana's 10% gain against Ethereum since late May. Despite the SEC's approval of several Ethereum ETFs, Ethereum's price gains were short-lived. Analysts speculate that Solana might be the next major cryptocurrency to receive its own ETF, further boosting its market position.

Pump.fun, the Solana-based memecoin generator, has become a popular platform for celebrities, charging a 1% trade fee and a small amount of SOL for memecoins listed on Raydium. Since January, Pump.fun has amassed nearly $28.9 million in SOL fees, recently hitting a daily revenue high of $1.47 million SOL. However, the platform has faced challenges, including significant outflows due to flash loan attacks, resulting in $2 million in losses.

Screenshot 2024-05-30 at 13.28.20.png
Source: Blockworks

The rise of celebrity-endorsed tokens has sparked debates about market signals, with some viewing it as a sign reminiscent of the 2021 bull cycle. Celebrity tokens often have poor track records, frequently linked to scams. Despite initial strong performances, tokens like MOTHER and JENNER have experienced significant declines. The crypto community remains cautious about the potential for pump-and-dump schemes and insider trading in these celebrity-endorsed tokens.

Conclusion

This incident highlighted the broader issue of celebrity crypto promotions, with the SEC having penalized several celebrities for illegal endorsements. The JENNER token controversy underscored the risks in the crypto space, particularly involving high-profile figures vulnerable to scams and social engineering.

The debate over the JENNER token’s legitimacy and Sahil Arora’s involvement persists. Both Jenner and Rich The Kid face ongoing scrutiny, with potential legal consequences looming if the tokens are deemed part of a coordinated scam.

FAQs

1. What happened with Caitlyn Jenner's crypto token?

Caitlyn Jenner launched a crypto token called JENNER in May 2024.  There was initial skepticism due to suspicious account activity promoting the token.  Jenner claimed her accounts were hacked, but questions remain about the token's legitimacy and potential involvement in a pump-and-dump scheme.

2.  What is a pump-and-dump scheme?

In a pump-and-dump scheme, the price of a security is artificially inflated through misleading promotions. Investors buy in at a high price, then the manipulators sell their holdings, causing the price to crash, leaving other investors with worthless assets.

3.  What are the potential consequences for Jenner and others involved?

If the token is linked to a pump-and-dump scheme, the SEC could take legal action.  Jenner and others involved could face fines or even criminal charges.

This article has been refined and enhanced by ChatGPT.

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