SafeMoon (SFM-USD) is a cryptocurrency with a seemingly broad focus. Its web site talks of constructing blockchain, metaverse and e-commerce initiatives, philanthropy and different such targets. It’s fairly the bold agenda.
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However, in the crypto world, SafeMoon has a lower than stellar popularity. It got here out to a bunch of hype final 12 months and initially skyrocketed in worth. At its peak, SafeMoon reached greater than $0.00001 per token. It’s now at $0.00000057. Mind the zeros there.
If you strip the first zeros off these costs, SafeMoon hit greater than 100 per token final 12 months and is at simply 5.7 now, or a greater than 94% decline in worth.
SafeMoon Carries On, But the Project Is Losing Steam
Recently, SafeMoon migrated from V1 to V2 of its platform. The builders stopped assist for V1 of SafeMoon, and the value and buying and selling quantity has continued to dry up. However, SafeMoon V2 can be down sharply in 2022.
It seems that there merely isn’t a lot natural demand for something associated to the SafeMoon ecosystem. Sure, the undertaking discovered consumers when people like Dave Portnoy and Jake Paul have been speaking about SafeMoon final 12 months. Portnoy, chances are you’ll recall, invested $40,000 in SafeMoon saying that “I don’t know how this works,” however seemingly pondering it was advertising stunt regardless. And, by way of return on funding, that was in all probability a profitable commerce.
Other influencers, nevertheless, provided far more promotional and fewer frank assessments of SafeMoon’s future. And whereas the influencers are in all probability doing tremendous, a few of their followers absolutely have regrets with the value down greater than 95% from its peak. Which leads to the lawsuits.
The Lawsuits Are Already Being Filed
As is usually the case when an funding collapses, individuals at the moment are turning to attorneys. Plaintiffs filed a category motion lawsuit in opposition to varied celeb and social media promoters of SafeMoon final month.
Plaintiffs allege that SafeMoon is a “Ponzi” scheme. And that it relied on tweets and different types of promotion from celebrities akin to Jake Paul, Nick Carter, Soulja Boy and Lil Yachty to entice traders into the scheme. The lawsuit cites postings from the likes of Paul, who’ve touted varied cryptocurrencies and non-fungible tokens (NFTs) over the previous 12 months. This sample of exercise would possibly give traders the sense that this made SafeMoon a reliable and reliable funding.
Instead, nevertheless, the lawsuit claims that SafeMoon’s improvement group has usually failed to obtain the improvement targets it specified by its roadmap, akin to constructing a crypto alternate. This, the plaintiffs contend, basically turned SafeMoon right into a slow-moving “rug pull” operation. Allegedly, celeb promoters akin to Paul might promote SafeMoon at excessive costs whereas giving followers the impression that the undertaking had a vivid future.
Influencers akin to Portnoy who overtly stated they didn’t perceive the fundamentals of the undertaking are possible on higher footing from a legal responsibility perspective. For those that touted SafeMoon too aggressively, nevertheless, we’ll see what the authorized system finally ends up pondering. In any case, it might be an fascinating authorized precedent for the crypto market, which now faces an enormous wave of rug pulls and failed initiatives, notably in the NFT area.
SafeMoon Verdict
Put apart the celeb drama and large value crash in SafeMoon for a minute. There’s arguably an excellent larger downside so far as it relates to SafeMoon as an ongoing funding. As our Stavros Georgiadis just lately documented, Safemoon merely doesn’t present a lot utility to the world.
The largest identifiable characteristic of SafeMoon is that holders obtain bonuses when different individuals promote the token. This, in impact, makes it simpler to justify holding an asset — even when it might probably be nugatory — since there may be seemingly a passive earnings related to holding onto the tokens.
At the finish of the day, nevertheless, is SafeMoon price something? That’s very a lot an open query proper now. If so, then holding onto extra SafeMoon tokens isn’t essentially an achievement. It’d seemingly be higher to personal fewer tokens of a crypto-project with a extra promising future.
SafeMoon can put all the doubters to mattress by delivering on its undertaking highway map and bringing new options into the world. This would make SafeMoon an truly fascinating holding and assist return extra buying and selling quantity to the token. Until there’s a lot signal of that truly taking place, nevertheless, SafeMoon is a straightforward keep away from.
On the date of publication, Ian Bezek didn’t have (both straight or not directly) any positions in the securities talked about on this article. The opinions expressed on this article are these of the author, topic to the InvestorPlace.com Publishing Guidelines.
Ian Bezek has written greater than 1,000 articles for InvestorPlace.com and Seeking Alpha. He additionally labored as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can attain him on Twitter at @irbezek.
https://investorplace.com/2022/03/safemoon-is-not-safe-and-definitely-not-heading-to-the-moon/
