Khamzat Chimaev’s Smash (SMASH) cryptocurrency is predominantly held by insiders and developer wallets, sparking concerns about insider trading in another celebrity memecoin, as revealed by onchain investigator ZachXBT.
Smash, a memecoin based on the Solana blockchain, was launched by the well-known mixed martial artist and UFC contender Chimaev. A staggering 78% of the Smash token supply was acquired by wallets related to insiders and developers, prompting worries about potential price manipulation, according to an analysis by the renowned onchain investigator. In a post dated July 4, ZachXBT disclosed that the Smash token plummeted by over 91% in the past day, trading at more than 0.004 Solana (SOL), or $0.53 per token, a significant drop from its peak of 0.01 SOL, as per Dexscreener data.
Insiders holding substantial amounts of tokens have the ability to significantly impact the price of a cryptocurrency by executing large market sell-offs. Cointelegraph has reached out to Chimaev’s team for a response.
According to ZachXBT’s findings, a minimum of 71% of the token supply is directly associated with insider wallets that were funded by the same Ethereum address that supported the Smash token’s developer wallet on Solana. The investigator noted that 24 addresses were funded with a total of 86.2 SOL tokens valued at $11,500, and these addresses have collectively purchased 712 million Smash tokens, accounting for 71.2% of the total supply.
After acquiring the majority of the supply, the 24 addresses have dispersed the tokens among smaller addresses, as illustrated in the analyst’s chart.
The rise of celebrity memecoins, while seen by some as a positive sign of mainstream adoption, has tarnished the industry’s reputation due to the poor price performance of these tokens. Within the first week of their launch, most celebrity-backed memecoins experienced a drop of at least 66%, including tokens like JENNER, DAVIDO, and RICH.
In a separate incident, American singer Jason Derulo faced controversy at the end of June when analytics firm Bubblemaps claimed that he sold thousands of dollars worth of his JASON token, despite pledging not to do so. Similarly, the DADDY memecoin, launched by former kickboxing champion Andrew Tate, was embroiled in insider trading accusations by Bubblemaps.
Despite these challenges, Tate’s token outperformed Iggy Azalea’s Mother token in terms of market capitalization on June 13. The industry is left to ponder whether a financial crisis could bring an end to the ongoing bull run in the crypto market.