On-chain investigator ZachXBT recently accused cryptocurrency influencer Zion “Ansem” Thomas of running pump-and-dump schemes online.
At the center of the debate is the manipulation of memecoins, a type of cryptocurrency that originates from an internet meme or some form of online humor.
ZachXBT Claims Crypto Influencers Exploit Their Followers for Quick Profits
The allegations were made on October 5, after blockchain investigator Zachary Wolk, better known as ZachXBT, disclosed that well-known crypto influencers like Ansem promote memecoins to exploit their followers, not because of genuine trading expertise. By promoting these unknown coins to a large audience, these influencers can quickly inflate their prices, earning substantial profits while the followers suffer losses.
This debate started after Andrew Kang from Mechanism Capital shared his thoughts on the rising trend of memecoins.
Kang referenced a speech by crypto figure Murad Mahmudov at Token 2049, which discussed a potential “Memecoin Supercycle.” This concept may have encouraged investors to invest in these speculative assets.
It seems as if @MustStopMurad's talk at Token2049 has catalyzed the next wave of capital reallocation into memecoins
Popcat seems to be one of the beneficiaries of these capital flows – now in price discovery
Setting up to join the 4 greats of this cycle – BONK, WIF, PEPE,… pic.twitter.com/MLap3FwbZ9
— Andrew Kang (@Rewkang) October 5, 2024
Mahmudov, who once led a crypto hedge fund that collapsed in 2020, has since gained a large following by promoting memecoins. His posts regularly feature lists of memecoins he believes will be successful, which get a lot of attention from crypto investors.
Kang’s comment on this growing memecoin trend sparked concerns as ZachXBT highlighted influencers’ role in manipulating prices.
It’s definitely the guy who blew up his fund in March 2020 with his own token down 80% in past year and pivoted to promoting pump and dumps.
— ZachXBT (@zachxbt) October 5, 2024
ZachXBT’s argument is straightforward. Prices surge artificially when influencers with large audiences promote small, lesser-known crypto projects.
However, once these influencers stop talking about the project, the price often drops, leaving regular investors stuck with near-worthless coins.
If you resort to promoting new low cap meme coins every few days to followers as a large account it’s bc you have no edge and have to use your followers instead.
Only thing which changed this cycle is grifting as large accounts became even more normalized than before (EX:…
— ZachXBT (@zachxbt) October 5, 2024
Ansem, one of the influencers ZachXBT mentioned, defended himself by arguing that discussing smaller crypto projects is part of the market and not necessarily wrong. He pointed to his success with WIF, a memecoin that saw a huge increase in value.
But ZachXBT quickly reminded him that many of the other coins Ansem had promoted didn’t do well and ultimately failed.
Idk how you do not see issue with having 500K+ followers and rotating micro cap coins shills every few days when you know very well people blindly buy off your posts impacting the price.
EX: Look at WYNN or all the celeb coins you shilled and all of the people who got rekt…
— ZachXBT (@zachxbt) October 5, 2024
This public disagreement between ZachXBT and Ansem touches on bigger concerns about the ethics of crypto promotion and the responsibility of influencers to disclose their interests when promoting high-risk assets to potentially vulnerable investors.