Allegations of insider trading hit Kamzat Chimev’s name token.
Most of Khamzat Chimaev's Smash (SMASH) cryptocurrency is held by insiders and developer wallets, raising the risk of insider trading for another celebrity, memecoin, according to onchain researcher ZackXBT.
Smash is a Solana-based memecoin started by famous mixed martial artist and UFC competitor Chimaev.
Up to 78% of the Smash token supply was purchased by insider and developer-related wallets, which led to price manipulation, according to analysis by the popular OnChain Investigator. In a July 4th X post, ZachXBT said:
“Hamzat has no ability to buy 78%+ of the supply from your team directly linking team wallets to internal wallets. Why are you all ruining your reputation with a meme coin scam in an instant?”
The Smash token has fallen more than 91% in the past day from 0.004 Solana (SOL), or $0.53 per token, down from its all-time high of 0.01 SOL, Dexscreener data shows.
Insiders with large token holdings can single-handedly control the value of a cryptocurrency by selling multiple holdings on the market.
Cointelegraph has reached out to Chimev's team for comment.
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Chimaev Group bought up to 78% of the offer: ZachXBT
According to ZachXBT's analysis, at least 71% of the supply can be directly linked to internal wallets funded by the same Ethereum address that funded the Smash token developer address on Solana.
Onchain Investigator wrote:
“Using timing analysis, 71% of insider and dev team wallets are directly connected because they are backed by the same address on Ethereum.”
The 24 addresses covered a total of 86.2 SOL at $11,500. These same addresses bought 712 million Smash tokens, or 71.2% of the total supply, according to ZachXBT.
After buying 71% of the supply, the 24 addresses distributed in smaller addresses, the analyst chart below shows.
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Celebrity memecoins are hurting the crypto industry.
While some are hailing the launch of celebrity memecoins as a sign of major adoption, the underperformance of popular memecoins is hurting the industry's reputation.
Within the first week of their launch, most celebrity-backed memecoins, including Jenner's, Davido's, and Rich's meme tokens, fell at least 66%.
American singer Jason Derulo's token was hit with controversy in late June, when analytics firm BubbleMaps said it sold thousands of dollars worth of JASON tokens despite the singer saying he would “never sell.”
DADDY, the memecoin launched by controversial former kickboxing champion Andrew Tate, has also been hit by insider trading allegations by Bubble Maps, June 12. X post:
Before Andrew Tate started promoting on X, insiders bought 30% of the stock.
Despite the lawsuit, Tate's token surpassed Iggy Azalea's MOTHER token in market capitalization on June 13.
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