Binance founder Changpeng “CZ” Chao has warned crypto investors against buying new meme coins launched to capitalize on his popularity, warning of the financial risks of trading celebrity-related tokens without the utility of an actual blockchain.
Memecoin emerged shortly after a fan page erected a golden statue of Zhao, shared a photo, and offered to send it to the founder of the world’s largest cryptocurrency exchange.
In a post on X on Wednesday, Zhao warned users not to purchase meme coins associated with the statue, as the token launch indicated that the creators were trying to “make a quick buck off of interactions” with the founders.
“While I appreciate this gesture, the fact that there is a meme coin associated with it means the creator probably just wanted to make a quick buck off of my interactions,” Zhao said. “This is something I don’t appreciate. Please don’t buy the meme.”
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Zhao-themed “golden statue” meme coin crashes 86% within hours
The latest Zhao-themed meme coin launch was not a lucrative one for its holders.
The price of the CZ STATUE (CZ STATUE) meme coin peaked at a market capitalization of $5.1 million around 10 a.m. UTC on Wednesday, before falling 86% within hours, according to cryptocurrency intelligence platform Nansen.
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Adding to the concerns surrounding memecoins, Nansen said more than 15% of the token supply is held by newly created crypto wallets, a sign of potential insider activity and a “red flag” for its tokenomics.
Despite their inherent lack of utility, BNB meme coins created new millionaires among crypto traders until a record $19 billion liquidation event earlier this month halted much of the speculative appetite fueling these tokens.
Meme coins rise based solely on social momentum, so whether profits are positive or not depends on luck.
In early October, a lucky crypto trader turned his initial investment of $3,000 into $2 million, a staggering 650x return, after a previous X post from Zhao sent the value of the BNB native meme coin soaring, Cointelegraph reported.
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