What Happened to SafeMoon, the Hyped-Up Crypto That Promised Riches?


safe moon

Image: Omar Marques/SOPA Images/LightRocket via Getty Images

Last year, a cryptocurrency called SafeMoon went viral on social media. You may have seen him endorsed by various celebrities and influencers like rapper Lil Yachty, YouTuber KEEMSTAR, and boxer Jake Paul. Its flashy promotion, promise of “safe” riches for investors using complex mechanisms, and its sub-cent value have become emblematic of the emerging world of decentralized finance, or DeFi.

Since then, safe moon has been on a roller coaster: key employees have left, two different groups of investors have thrown out class action lawsuits against the company and its famous promoters accusing it of “pump and dump” fraud, the price of the token is down about 85 percent in just a few months, shutting down some of the early famous investors who pumped it up, like Dave Portnoy, Founder of Barstool Sports, who called it his “worst buy.” Also, Coffeezilla, a leading independent researcher investigating crypto scams has accused the people who remain in the company misappropriation of millions of dollars, which has spurred many investors to double down on their defense of SafeMoon. Coffeezilla videos on SafeMoon have been viewed 2 million times.

Regardless of the company’s ultimate fate, SafeMoon’s story is one of a rising star becoming a warning to people interested in investing in cryptocurrencies and more complex DeFi products.

Molly White, a well-known crypto critic who runs the popular Twitter account and website called “web3 works great,” agreed.

“I am looking forward to seeing how the litigation goes, because it could be a strong signal to influential people who have engaged in pump-and-dump schemes without any apparent fear of repercussions,” White said in an online chat.

SafeMoon, as well as its CEO and other employees, did not respond to multiple requests for comment for this article, but Motherboard spoke with SafeMoon CEO John Karony for an update. CRYPTOLAND episode in November.

The SafeMoon story started last year, when the cryptocurrency was launched and almost immediately attracted a lot of attention thanks to its unusual scheme: every time someone sells the SafeMoon token, 5 percent of the proceeds go back to the current holders, and another five percent are destroyed. This system is designed, in theory, to reduce the supply of the token and increase its price, encouraging investors to hold SafeMoon rather than speculate and day-trade it. As the name implies, it was supposed to be a “safe” way to get to the moon, in crypto parlance when a token’s value skyrockets.

So far, this wouldn’t make SafeMoon particularly special. Other cryptocurrencies in DeFi adopt similar schemes, and SafeMoon could even be said to be simpler. What may best explain SafeMoon’s rise is the number of influencers who have bought into and openly endorsed the project, encouraging others to join.

“CHECK YOUR #SAFEMOON RIGHT NOW! The price is through the roof! brother, we are rich! KEEMSTAR tweeted to his more than two million followers in April of last year.

“I told everyone the moon was sure to rise lol”, tweeted Lil Yachty, who has over five million followers.

But Safemoon hasn’t made it to the moon, despite having high-profile boosters. Instead, he has fallen to Earth. SafeMoon’s price hit an all-time high of $0.003145 in early January, according to CoinMarketCap, and has been falling ever since. Its price is currently $0.0004731. Amid the seemingly unstoppable decline, the company took a keen interest in promoting itself as much more than just a crypto token.

“While memecoins may serve a different purpose, SafeMoon is not a memecoin. We have a real mission behind us for a technology company. And again, our plan is to bring the future into the now,” SafeMoon’s Karony told Motherboard in November.

As the value of the token continued to drop, Karony unveiled a nebulous project called Operation Phoenix—a misspelling of “phoenix” that Karony pronounces as “fay-nix”, which SafeMoon investors currently hope will turn the project around. It is supposed to bring wind turbines to individual homes, including in Africa, as part of “a mix of multiple innovations combined into a single SafeMoon ecosystem.”

Operation Pheonix is ​​not a “one-off project,” says Karony in a revealing video from last year. This is how he describes it: “It is the application and integration of innovative technologies to increase greater efficiency through the proper and correct use of decentralization in the IOT macro infrastructure.”

SafeMoon showcased the wind turbines in the Operation Pheonix presentation video. But the turbines are actually made by a clean energy startup called semitiveas Coffeezilla pointed out in their SafeMoon video.

A Semtive spokesperson told Motherboard that SafeMoon has purchased several wind turbines. The spokesperson said that Semtive allows customers to add their brand to the turbines, as long as they also include the Semtive brand.

In Operation Phoenix reveal videoKarony reads from a teleprompter to describe that SafeMoon works on “manipulating the surface of blades in smaller turbines by using hydrophilic and hydrophobic particles.” Karony claims that this will make wind turbines more efficient. In practice, it looks like Semtive’s wind turbine covered in little black dots.

It is not clear what exactly is the plan for these wind turbines and how they will generate money for the company and users. In a video posted in January, Karony described its integration with a planned metaverse game. “So you have the wind turbine in real life, spinning and burning, doing its thing, and then in the game you have a resource generator that you set up on your little plot of land, and it’s generating resources based on the energy produced in the real world,” Karony said. A long Reddit post speculating on what this would ultimately look like was Posted later by SafeMoon as a community update.

As part of the Pheonix Project, SafeMoon also began looking at Africa, specifically Gambia, in a family crypto tone to serve the “unbanked”. SafeMoon claimed to be working with local governments to adopt the token as a local currency. To date, that project has not resulted in anything concrete.

Do you have information about SafeMoon or other similar crypto companies? We would love to hear from you. You can contact Lorenzo Franceschi-Bicchierai securely on Signal at +1 917 257 1382, Wickr/Telegram/Wire @lorenzofb, or email [email protected]

In a recent captain’s log message Speaking to the SafeMoon community, Karony said work in Africa remains “one of our top priorities on our impact agenda,” but said a recent trip to The Gambia mainly reminded her of opportunities elsewhere, including in the US. USA

“We are continuing our efforts in The Gambia directly, through our own networks,” the blog states. “This presents the most efficient and effective way to achieve maximum impact for the people and quality of life in that region. While The Gambia will always be high on my heart and priorities, the recent trip illuminated a myriad of other opportunities in other parts of Africa and the world, including the United States.

SafeMoon also promises to develop and launch its own cryptocurrency exchange: SafeMoon is only available through decentralized exchanges with names like PancakeSwap and smaller exchanges like BitMart (compared to leaders Binance and Coinbase), but that has yet to materialize. The company released its own crypto wallet, but it looks like a copy of Trust Wallet, according to Blamebootsy, another independent blockchain researcher who helped Coffeezilla in its SafeMoon investigation.

Trust Wallet did not respond to a request for comment.

The attractiveness of SafeMoon allowed the company to attract not only investors, but also people willing to help the project grow. And despite falling prices and promises yet to be fulfilled, the project still has plenty of true believers who are willing to defend it and are holding on to their tokens in the hope that Project Pheonix can turn things around. .

However, not all have maintained such an optimistic disposition. In fact, the lawsuits directed at Safemoon, its executives, including Karony, and celebrity promoters accuse them of making “misleading promotions and celebrity endorsements” that artificially inflated the price of the token, “causing investors to buy these losing investments.” at inflated prices. The suit alleges that SafeMoon’s website advised investors to “HODL!” but alleges that executives and promoters sold tokens under his control.

“This case arises out of a scheme between various unscrupulous individuals in the cryptocurrency industry to deceptively promote and sell the digital asset associated with SafeMoon (SAFEMOON tokens) to unsuspecting investors,” one of the lawsuits read.

One person involved in the project, who calls himself The Ginger, became a moderator on SafeMoon’s official Discord in March 2021 and engaged in livestreams with company employees, according to one of the class action lawsuit claims. (The Ginger asked to remain under the pseudonym to protect his privacy and avoid retaliation.)

“I drank all the Kool-Aid,” The Ginger told Motherboard. “We built a HUGE cult following.”

The Ginger said that the “main reason” for SafeMoon’s early success and going viral was due to several Reddit Ask Me Anything sessions that people involved in the company hosted on an almost weekly basis.

“They started out with some really rudimentary stuff, but headlines were tuning in and seeing vape pens and hoodies, relaxed, excited, happy people who seemed to genuinely enjoy each other and what they were doing,” he said. “They were ‘cool’ and didn’t seem to want to ‘sell’ anyone. Just engage people along the way.”

But now that the allegations against SafeMoon have been aired publicly in the Coffeezilla video, The Ginger said that “the project currently has no responsibility, oversight or real experience in the space.” He believes the accusations made by Coffeezilla, he said.

The Ginger left the project in May 2021, when he joined a different crypto project, called Piggy Tokens, created by several former SafeMoon employees. Months later, he too abandoned that project, accusing the creators of defrauding investors and himself, according to court documents.

“What we know about SafeMoon mainly is that there are a lot of questions that need to be answered. And a lot of information that needs to be examined by a third party, because it seems that there is embezzlement.” Blamebootsy he told Motherboard in an online chat. “I want to call that theft? No, because I am not a judge. And that’s not my place to report theft. Do I think that there is a lot of money that needs to be accounted for and that someone needs to clearly say where it is and what is going to happen to it? Yeah, I think that’s a fair thing to want.”

In the midst of the storm, SafeMoon sails led by its captain, Karony.

“It will probably come down to this, which is trust. You know, you have to be able to build trust in a trustless industry,” Karony told Motherboard last year.

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