Once again, memecoin enthusiasts have taken a gamble on a range of questionable tokens, this time coinciding with the sentencing of Sam Bankman-Fried, which resulted in a 25-year prison sentence for him.
On March 28, Judge Lewis Kaplan sentenced Bankman-Fried, the former CEO of FTX, to a total of 25 years in prison. This makes him the first person from FTX to face imprisonment for the collapse of the exchange in November 2022, which is considered one of the largest corporate collapses in the history of the United States.
Interestingly, just a few hours before Bankman-Fried’s sentence was announced, a developer introduced a memecoin called Sam Baseman Fraud, humorously using the ticker symbol FTX, on the Coinbase layer-2 network Base.
In a mere seven hours, the FTX memecoin experienced an astonishing rally of over 23,300%, reaching a market capitalization peak of $1.5 million on March 28, according to DexScreener data.
As is often the case with memecoins, the token quickly went into a steep decline, plunging more than 85% within three hours. At the time of writing, the memecoin’s price has stabilized around $0.06, still down 60% from its all-time high.
Just two hours after the sentencing, another memecoin inspired by SBF, called Som Bonkmon Fraud, was launched on the Solana network.
Initially, the Solana-based SBF memecoin experienced a surge in market capitalization, reaching around $20 million, which was an 18,000% rally from its initial value of $30,000. However, the token quickly sold off, plummeting over 95% from its peak.
At present, it is trading around $0.0008, only slightly above its initial listing price.
These Bankman-Fried-themed memecoins join a growing list of memecoins that draw inspiration from crypto and political figures. Other political memecoins, such as Boden and Tremp, have also tried to capitalize on the attention surrounding the upcoming United States election.
The memecoin trend experienced a significant resurgence with the rise of a Solana-based memecoin called Dog Wif Hat (WIF), which saw its market capitalization soar from around $50,000 to an impressive $3.5 billion in just four months.
Other newer meme tokens, such as the frog-themed Pepe (PEPE) on Ethereum and the rooster-themed Coq Inu (COQ) on Avalanche, have also seen substantial rallies.
It’s important to note that memecoins are highly speculative investments that often lack any utility or underlying value aside from topical interest and hype.
Interestingly, the native cryptocurrency of the now defunct exchange, FTX Token (FTT), also experienced a significant drop of over 16% upon news of Bankman-Fried’s sentencing, according to CoinGecko data.
In conclusion, investors should exercise caution when venturing into Solana memecoins, as there are several risks to be aware of.