The setup and initial pump
Yesterday, a crypto influencer known as SmokezXBT managed to extract $430,000 from his followers through a memecoin scheme that received an unexpected boost from Binance founder Changpeng Zhao. It all started with a token called Shanghai Composite Index, ticker SCI6900, which had been created on the Binance Smart Chain around four days prior.
According to crypto investigator Dethective, SmokezXBT began purchasing the SCI6900 along with several other influencers. He then promoted the memecoin to his 60,000 followers and spent about an hour selling his holdings. But the story doesn’t end there. Around 4:44 UTC, SmokezXBT began purchasing the token again.
The CZ effect
What happened next was truly a coincidence. Just one minute and 34 seconds after SmokezXBT purchases resumed, at 4:46 UTC, CZ commented “Is this real? on the post. This simple comment from the Binance founder caused the market cap of memecoin to skyrocket from $3 million to almost $30 million, a tenfold increase in just a few moments.
In less than two minutes, SmokezXBT pocketed $430,000 as the token’s price soared an astonishing 4,557%. He hasn’t exactly hidden his success either, writing “I told you so” and responding to Dethective with “Keep hating bozzos.” SmokezXBT later explained his strategy: He bought SCI6900 when it had a market cap of $90,000, held it, then bought more at a market cap of $3 million and sold it after CZ’s post, calling it a “masterclass in meme simulation.”
A model of behavior
Apparently, this wasn’t SmokezXBT’s first rodeo. On-chain data shows that it has 1,466 deleted coin addresses according to Dethective’s investigation. Another well-known crypto sleuth, ZachXBT, weighed in, calling SmokezXBT a “known scammer” and linking it to a 2023 incident involving a memecoin called BLOOD.
In this previous case, SmokezXBT promoted BLOOD for days, brutalized his followers, and then deleted all of his social media accounts. When ZachXBT confronted him about it, SmokezXBT admitted to lying to his supporters, but gave conflicting stories, first claiming he created BLOOD and then claiming two developers hired him to market the coin. ZachXBT noted that the influencer was “playing the victim and making excuses.”
Broader Memecoin Context
CZ has been more active in the memecoin space lately, especially after the launch of the Meme Rush wallet which gives users early access to new memecoins. Just a few days ago, BNB memecoin season was seemingly at its peak with 70% of investors reportedly making profits.
But the timing of this incident comes as memecoins on Binance have suffered significant consequences. The crypto market recently saw its largest single-day liquidation, wiping out $9.55 billion. Binance memecoins specifically fell 20.4% over the past 24 hours, with the overall market cap down 19.8% according to CoinGecko.
It is worth noting how quickly these situations can evolve. One minute you’re looking at a relatively obscure token, the next it’s attracting the attention of major industry figures, and suddenly people are winning or losing life-changing amounts of money. The speed at which these markets are evolving is both fascinating and concerning.
I think what stands out here is how just one comment from someone like CZ can completely transform a situation. This raises questions about influence and accountability in these decentralized spaces. But then again, people have been making similar arguments for decades about market manipulation in traditional finance. The tools may change, but the underlying behaviors remain familiar.
