‘This is a scam’: Crypto influencers speak out about Safemoon ‘pyramid scheme’
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A new cryptocurrency called Safemoon is indeed mooning — thanks in part to a spate of glowing articles in the mainstream press — but many influential members of the crypto community in Australia and overseas are calling out what they are saying is an obvious pyramid scheme.
The value of the decentralised finance token on Wednesday has grown nearly 12-fold in the past week — and people who bought in at launch just five weeks ago were sitting on a mind-boggling 200x gain. (Late last night it began paring back its gains, however.)
Invested in #Safemoon on day 1… Thought is was going to be a scam due to all the moon tokens popping up so I sold… this is what my bag would have been worth as of today. Fuck me. pic.twitter.com/zZ0w5UDiMo
— will.io (@crypto_drift) April 19, 2021
I’d like to test the theory that money can’t buy you happiness🚀🚀🚀#SAFEMOON
— SAFEMOON SQUAD (@SAFEMOONSQUAD) April 19, 2021
#SAFEMOON We are the hottest token in the world! We’ve done the unthinkable! Next stop 🌕! This is only the beginning! Make plans to do the unthinkable-because we already have! It’s just the beginning of something amazing!🚀🔒🌝#SafeMoonCommunity #BSC #safemoonarmy @papacthulu pic.twitter.com/xfDbqjdaRg
— Shaun Witriol (@ShaunWitriol) April 21, 2021
However while the Safemoon website uses plenty of technical jargon to describe its utility, a number of crypto influencers call it a get-rich-quick scheme with no real purpose other than to enrich early adopters.
While most cryptocurrencies try to minimise transaction fees to encourage real-world adoption, Safemoon charges sellers a hefty 10 to 12 per cent penalty to withdraw their funds. Half of that is burned (destroyed), and the other half is redistributed to existing tokenholders, encouraging them to hold onto the coins.
“I’m pretty convinced this is a pyramid scheme and that you will lose your money if you get in right now, because this is a scam that is growing faster than everything I have ever seen before,” Dutch YouTuber Quinten François said in a video posted on Wednesday.
“I know a lot of people will hate me for this, but I’m already five and a half years in crypto… I know what scams are and what are not.”
François said he was one of the first in the crypto community to warn against Bitconnect, a cryptocurrency pyramid scheme that surged in value during the last bull run in 2017 before eventually collapsing in January 2018.
The thing with #Safemoon is: there will be 1 million holders tomorrow and this is going to end badly for many of them.
After the inevitable happens, these are the people who will hate #crypto, leave it and never return, and call it all a scam.
— Young And Investing (@QuintenFrancois) April 20, 2021
The Twitter account @waronrugs issued a scam advisory on Wednesday, saying that the likelihood of losing all funds was “absolute”.
(The account’s username refers to “rug pulls,” a type of exit scam that has plagued decentralised finance tokens in which the creator exploits a hidden loophole to drain its value).
❌ Scam Advisory #115 – SafeMoon #SAFEMOON (0x8076C74C5e3F5852037F31Ff0093Eeb8c8ADd8D3)
Reason: Owner owns more than 50% of the liquidity and refuses to fix it. He could pull LP and sell tokens, creating a rug pull.
Likeliness of losing all funds: Absolute
— #WARONRUGS❌ (@WARONRUGS) April 20, 2021
Australian Facebook group Crypto Paradox, which has over 32,000 members, yesterday warned that anyone trying to promote Safemoon would be instantly banned as it was a scam.
Kiwi crypto influencer Lark Davis, who has over 200,000 followers on Twitter, issued his own warning.
#safemoon is worth almost 7 billion fully diluted market cap…. insane! People really love ponzis, seems that scams always pump the hardest.
— Lark Davis (@TheCryptoLark) April 20, 2021
Alex Saunders, the Tasmanian host of the popular digital news channel Nuggets News, called out one such article.
Most read Aussie news site promoting this #Safemoon scam. A project that pops up overnight, promises profit, penalizes sellers & guarantees safe passage to a celestial object. Yes I know you’re mate Dazza made 500%, that’s how ponzis work initially. 🚨🚔🌕https://t.co/qGnyM0DL3g
— Alex Saunders 🇦🇺👨🔬 (@AlexSaundersAU) April 20, 2021
A number of Safemoon hodlers seem aware it is a pyramid scheme but say there’s still money to be made in it.
— twsn (@thnewha) April 21, 2021
Bitconnect was for a brief moment a top 10 #crypto, the people making money did not want to accept it was a ponzi, they made every excuse to justify it, and attacked anyone who stated the obvious.
Then it rug pulled and everyone lost big time. #safemoon is no different.
— Lark Davis (@TheCryptoLark) April 21, 2021