Following the historic sentencing of Sam Bankman-Fried to 25 years in prison, memecoin enthusiasts have once again turned their attention to a series of dubious tokens. The former CEO of FTX was found guilty on seven counts of fraud, marking the first instance of a person from FTX being sentenced to prison after the exchange collapsed in November 2022, which was considered one of the largest corporate collapses in United States history.
Just before Bankman-Fried’s sentencing, a developer launched a memecoin called Sam Baseman Fraud, humorously using the ticker FTX, on the Coinbase layer-2 network Base. Within seven hours, the FTX memecoin surged by over 23,300%, reaching a market capitalization of $1.5 million on March 28th, according to DexScreener data. However, the token quickly plummeted by more than 85% in just three hours. As of the time of publication, the memecoin is trading around $0.06, down 60% from its all-time highs.
Shortly after Bankman-Fried’s sentencing, another SBF-themed memecoin called Som Bonkmon Fraud was launched on Solana (SOL). The Solana-based SBF memecoin experienced an initial surge to a market capitalization of around $20 million, a gain of more than 18,000% from its launch value of $30,000. However, it also suffered a rapid decline, dropping more than 95% from its high. It is currently trading around $0.0008, slightly above its original listing price.
These memecoins are the latest addition to a series of topical memecoins inspired by crypto and political figures. A number of political memecoins, such as Boden and Tremp, have tried to take advantage of the attention surrounding the upcoming United States election.
The memecoin trend has experienced a significant resurgence following the rapid rise of a Solana-based memecoin called Dog Wif Hat (WIF), which went from a market cap of about $50,000 to $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 upward rallies.
It’s important to note that memecoins are highly speculative investments that often lack any utility or base valuation outside of current interest and hype. In addition, the native cryptocurrency of the now defunct exchange, FTX Token (FTT), also took a significant nosedive of more than 16% when news of Bankman-Fried’s sentencing broke, according to CoinGecko data.
Investors should be cautious when diving into Solana memecoins, as there are potential dangers to consider.