SafeMoon launched with a novel tokenomics structure: 10% tax on every transaction. 5% redistributed to holders, 5% locked in the liquidity pool. The pitch was genius: holders who didn't sell earned more tokens. The community exploded. By April 2021, SafeMoon had a $6B market cap. Celebrity endorsements from Jake Paul, Lil Yachty, and Nick Carter amplified the hype.
In October 2023, the SEC and DOJ charged SafeMoon executives with securities fraud. Investigation revealed insiders had been draining liquidity using hidden wallets. The 10% sell tax — marketed as "protecting" the community — actually prevented ordinary users from exiting while insiders funneled money out.
Transaction taxes do not protect investors — they protect insiders. If the mechanism that "protects" you also benefits the founders, question it. Celebrity endorsement is marketing, not due diligence. Read more about <a href="https://www.web3farmyard.com/blog/how-to-identify-scam-projects-in-crypto/">identifying scam projects</a> before investing.