Binance founder Changpeng Zhao warned investors not to buy a new CZ-themed memecoin after its price crashed 86% within hours of launch.
Binance founder Changpeng “CZ” Zhao warned crypto investors not to buy a new memecoin launched to capitalize on his popularity, cautioning against the financial risks of trading celebrity-linked tokens with no real blockchain utility.
The memecoin emerged shortly after a fan page built a golden statue of Zhao, sharing pictures and offering to send it to the founder of the world’s largest crypto exchange.
Zhao warned users in a Wednesday X post not to buy the memecoin associated with the statue, as the launch of the token signals that the creators were looking to “make a quick buck off an interaction” with the founder.
“While I want to appreciate the gesture, the fact that there is a meme coin associated with this means the creator probably just wanted to make a quick buck off an interaction from me,” said Zhao. “This is something I don’t appreciate. Don’t buy the meme.”
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The launch of the latest Zhao-themed memecoin didn’t prove lucrative for its holders.
The CZ STATUE (CZ STATUE) memecoin’s price fell 86% within hours after it peaked at a $5.10 million market capitalization at around 10:00 am UTC on Wednesday, according to crypto intelligence platform Nansen.
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Adding to the concerns surrounding the memecoin, over 15% of the token supply was being held by a newly created cryptocurrency wallet, which signals potential insider activity and marks a “red flag” for its tokenomics, according to Nansen.
Despite their intrinsic lack of utility, BNB memecoins created new millionaires among crypto traders before the record $19 billion liquidation event halted the speculative appetite fueling these tokens.
Since memecoins rely solely on social momentum to rally, making a positive return is often a question of luck.
At the beginning of October, a lucky crypto trader turned an initial investment of $3,000 into $2 million, generating an impressive 650-fold return after a previous X post from Zhao sent a BNB-native memecoin’s value soaring, Cointelegraph reported.
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