Once again, memecoin enthusiasts have shown their willingness to invest in questionable tokens, this time coinciding with the sentencing of Sam Bankman-Fried. Bankman-Fried, the former CEO of FTX, was handed a 25-year prison sentence by Judge Lewis Kaplan on March 28. This marks the first time a person from FTX has faced prison time for the collapse of the exchange in November 2022, which was considered one of the largest corporate collapses in US history.
Interestingly, just hours before Bankman-Fried’s sentencing, a developer launched a memecoin called Sam Baseman Fraud on the Coinbase layer-2 network Base. The memecoin, humorously using the ticker FTX, experienced a significant rally of over 23,300% within a mere seven hours. Its market capitalization reached a peak of $1.5 million on March 28, according to DexScreener data.
As is often the case with memecoins, the token quickly experienced a steep sell-off, dropping more than 85% in just three hours. Currently, the memecoin’s price has stabilized around $0.06, which is a 60% decrease from its all-time highs.
Following Bankman-Fried’s sentencing, another memecoin named Som Bonkmon Fraud, based on Solana (SOL), was launched approximately two hours later. This Solana-based memecoin initially saw its market capitalization soar to around $20 million, a staggering increase of over 18,000% from its launch value of $30,000. However, the token rapidly sold off, plunging more than 95% from its peak.
At present, the memecoin is trading at approximately $0.0008, only slightly above its initial listing price.
The emergence of Bankman-Fried-themed memecoins adds to the growing list of topical memecoins inspired by crypto and political figureheads. Other political memecoins, such as Boden and Tremp, have also sought to capitalize on the attention surrounding the upcoming US election.
The memecoin trend gained renewed momentum after the meteoric rise of Dog Wif Hat (WIF), a Solana-based memecoin that went from a market capitalization of around $50,000 to $3.5 billion in just four months. Additionally, other newer meme tokens like Pepe (PEPE) on Ethereum and Coq Inu (COQ) on Avalanche have also experienced significant rallies.
It’s important to note that memecoins are highly speculative investments that often lack utility or a solid valuation beyond their topical interest and hype.
CoinGecko data reveals that FTX Token (FTT), the native cryptocurrency of the now-defunct FTX exchange, also experienced a decline of over 16% upon news of Bankman-Fried’s sentencing.
In conclusion, investing in Solana memecoins carries several risks that investors should be aware of before diving in.