The value of the decentralized finance (DeFi) token SafeMoon, an altcoin project on the Binance Smart Chain (BSC), has plunged significantly despite a network upgrade that was touted to inspire more interest in the coin driving the price up.
Between January 1, 2022 and June 19, the value of SafeMoon has slumped by 78.8% from $0.000002285 to $0.000000003635. SafeMoon price has been trading in a tight range although it had some significant short-term gains in late March.
Notably, the price correction has correlated with the general cryptocurrency market sentiments. However, SafeMoon underwent the V2 upgrade that sought to increase the cryptocurrency’s quality, security, and accessibility while unlocking different developments for the future alongside attracting more users.
Furthermore, the project has recently faced rising questions about its authenticity amid allegations of being a rug-and-pull scheme. Some of the allegations were first fronted by YouTuber Stephen Findseisen, a.k.a. Coffeezilla.
Finbold reported that Findseisen uncovered an alleged pump-and-dump scheme by former SafeMoon marketing executive Ben Philips. The scheme allegedly involved funds of up to $12 million.
Philips is accused of expressing bullishness towards SafeMoon calling on his Twitter followers to “buy the dip” while selling the coin at an inflated price, earning himself millions of dollars.
Amid rising controversy around the token, the then SafeMoon Vice President Charles Karony stepped down from his role at a time the project was facing lawsuits from investors.
According to Karony, he intended to finish his college degree as the main motivation for leaving the project. Interestingly, Karony left his position in the wake of a lawsuit against SafeMoon, its executive officers, and celebrity promoters.
The defendants are accused of participating in a Ponzi-like pump-and-dump scheme in relation to the SafeMoon tokens.
Notably, before the controversy, analysts had issued a warning to investors about SafeMoon being a potential scam.
In another lawsuit, SafeMoon is accused of illegally selling the tokens failing to identify them as securities in line with the Securities and Exchange Commission laws.