Celebrity Meme Coins: The Rise of Crypto Scams
In May 2022, Caitlyn Jenner, the former Olympic athlete, launched her own cryptocurrency token, $Jenner, which quickly soared to a market capitalization of over $46 million. The token was marketed as a way to "make America great again" and was linked to a tweet from Jenner shaking hands with Donald Trump. The launch of $Jenner was part of a growing trend of celebrities issuing their own cryptocurrency tokens, often referred to as "meme coins."
Meme coins have been in circulation for over a decade, and their value is often driven by internet jokes, pop culture fads, and speculation. The tokens have no real-world value, but their price can fluctuate rapidly, allowing insiders to profit from their sale. However, the tokens are also likely to crash, leaving late investors with significant losses.
Nicolas Vaiman, a French engineer, became suspicious of the meme coin trend and began to investigate the behind-the-scenes dealings of the token launches. He discovered that many of the celebrities promoting the tokens were likely accomplices in a pump-and-dump scheme, where the same person or group would buy up a large portion of the token supply and then sell it to unsuspecting investors, causing the price to soar.
Vaiman’s research led him to Sahil Arora, an Indian national living in Dubai, who was involved in the launch of several celebrity tokens, including $Jenner. Arora was accused of running a pump-and-dump scheme, and several celebrities, including Jenner, claimed to have been conned by him.
The scheme was so elaborate that even the FBI got involved, creating its own meme coin, $NexFundAI, to track and identify illegal sales. The agency charged several individuals with market manipulation and fraud, and the case is still ongoing.
The rise of meme coins has raised concerns about the lack of regulation in the crypto market. In the United States, the Securities and Exchange Commission (SEC) has taken action against several celebrities and crypto companies, including Justin Sun, who faces fraud charges over his involvement in celebrity coins.
Despite the crackdown, the meme coin trend shows no signs of slowing down. In November, Haliey Welch, better known as Hawk Tuah Girl, launched her own meme coin, which quickly reached a market capitalization of $490 million before plunging by 90% after a small group of wallets sold off a large portion of the token supply.
Vaiman continues to track and expose suspected pump-and-dump schemes, and his work has led to several celebrities and crypto companies facing legal action. The case of Sahil Arora remains open, and Vaiman is still holed up in France, safeguarding his location due to concerns for his safety.
The rise of meme coins has also raised questions about the impact of celebrity endorsements on the crypto market. Several celebrities, including Donald Trump and his wife Melania, have issued their own meme coins, and the trend has become a popular way for influencers and celebrities to cash in on the crypto craze.
As the crypto market continues to evolve, the trend of celebrity meme coins is likely to persist, with both opportunities and risks for investors. Vaiman’s work highlights the need for greater regulation and transparency in the crypto market, as well as the importance of caution when investing in meme coins.
