SafeMoon price plunges in response to class action lawsuit against Jake Paul, Nick Carter and Soulja Boy
- A class-action lawsuit was filed against SafeMoon and its promoters, alleging false and misleading statements made to investors.
- The lawsuit alleges celebrity endorsements inflated market demand and pumped SafeMoon prices before investors dumped them.
- Analysts believe SafeMoon downtrend is not over yet, and predict more pain for bulls.
SafeMoon project and its promoters have been hit with a class-action lawsuit criticizing an alleged pump and dump strategy by promoters. SafeMoon price has posted 22% losses over the past week, and analysts predict the downtrend will continue.
SafeMoon price suffers bloodbath, bulls could suffer more pain
A class-action lawsuit was filed against SafeMoon on February 17, 2022. Following the lawsuit, SafeMoon price suffered a massive drop, posting 22.7% gains over the past week. The case alleges promoters of misleading traders and selling SafeMoon tokens to unsuspecting investors in a “pump and dump” scheme.
The suit alleges that SafeMoon’s promoters used celebrity endorsements to inflate the price of the underlying asset. Once SafeMoon price was inflated in response to a celebrity endorsement, promoters dumped their holdings on unsuspecting investors, misleading them in the process.
John Karony, CEO of SafeMoon, Jack Haines-Davies, COO, Ryan Arriaga, Global Head of Products, and Shaun Witriol, Henry Wyatt from the team are the defendants in the lawsuit.
Celebrities involved in the litigation process are YouTuber Jake Paul, Ben Phillips, and rapper Soulja Boy.
Proponents believe that the lawsuit is one of the key factors negatively influencing SafeMoon price. FXStreet analysts evaluated the SafeMoon price trend and noted it halted the bullish breakout. Analysts identified a broken neckline in the Head & Shoulders pattern after support failed. SafeMoon price is falling back to lows of $0.0014.
Analysts have predicted a choppy trend in SafeMoon price and capped downside movement at $0.0009.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
