Rappers Lil Yachty, Soulja Boy, and rapper/boxer Jake Paul are caught up in a class-action lawsuit claiming they were involved in a pump and dump scheme.
The rappers are among the defendants named in a 60-page complaint over the SafeMoon token.
The lawsuit claims that SafeMoon founder and CEO Braden John Karony recruited celebrities to promote the token, artificially inflating its value.
Karony and other key executives controlled vast amounts of the token, which they never disclosed to the public.
Thanks to the celebrity endorsements, the token’s value rose by 875% throughout 2021.
Several executives left the company that year as the value of the SafeMoon token began to crash. By December 31st, 2021, the token had lost 80% of its value, and the company failed to deliver on various projects, including a hyped-up crypto wallet.
The lawsuit claims executives did a “slow rug pull” on investors, leaving them with massive losses.
Lil Yachty, Soulja Boy, and Jake Paul are not the first rappers to get caught up in lawsuits involving cryptocurrency schemes.
T.I. was sued but cleared over similar allegations involving the promotion of the FliK Token. The Atlanta rapper ended up paying out a $75,000 settlement to the SEC.
Paragon was founded by former beauty queen/reality TV show “star” Jessica VerSteeg and her husband, Russian entrepreneur Egor Lavrov. The pair have since disappeared.
In July of 2021 July 2021, a judge ruled Game had to pay $12 million in damages for promoting the company’s PRG Coin.