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FTX Founder Sam Bankman-Fried’s Sentencing Sends Meme Coins Surging
If the recent 25-year prison sentence handed down to disgraced FTX founder Sam Bankman-Fried caught anyone off guard, the subsequent rise of meme coins in response may not come as a surprise. In a predictable turn of events, opportunistic traders seized on the news, causing certain meme coins to experience explosive growth, only to quickly plummet back to insignificance.
One such instance unfolded on the Ethereum scaling network Base, where a daring individual launched a meme coin called “Sam Baseman Fraud” just hours before Bankman-Fried’s sentencing hearing commenced at 6:00 am ET. By 1:00 pm, shortly after the conclusion of the hearing, the token (FTX) had skyrocketed by nearly 35,000%, reaching a price just above one cent before its rapid decline. As of the time of this writing, the token’s value has dropped to around 4/10ths of a penny, although it remains up by over 9,500% since its inception.
Despite the extreme volatility of “Sam Baseman Fraud,” traders have not shied away from the opportunity. The token has already generated over $3.4 million in trading volume today, as reported by DexScreener. While the token’s market capitalization currently stands at $400,000, with $80,000 in liquidity, these figures have been on a downward trend, suggesting waning interest over time.
Meanwhile, over on Solana, a strikingly similar token dubbed “Som Bonkmon Fraud” (SBF) emerged, following a comparable trajectory albeit with slight variations in timing. Created the day prior, the Solana SBF token surged by an astonishing 15,000% the previous evening, continuing its climb right up to the start of Bankman-Fried’s sentencing hearing. However, the token began a steep decline soon after, plummeting from nearly a penny to less than 9/100ths of a cent presently, marking a 90% decline in the past 24 hours.
Despite the inevitable fate awaiting holders of such volatile tokens, the allure of quick gains persists. “Som Bonkman Fraud” has experienced an astounding $24 million in trading volume within the last day, maintaining $146,000 in locked liquidity, and currently holds a market cap of $675,000.
Conclusion: Proceed with Caution
The swift emergence and subsequent decline of meme coins tied to major news events underscore the speculative nature of the cryptocurrency market. While these tokens may promise substantial returns in the short term, they often lead to losses as creators vanish with investors’ funds, a practice commonly referred to as “rug-pulling.”
Investors are advised to exercise caution and conduct thorough research before engaging with such high-risk assets, as the allure of quick profits may ultimately result in significant financial losses. It is essential to approach speculative tokens with discernment and to prioritize long-term sustainability and security over short-lived gains.
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