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A meme coin inspired by the wildly popular "Baby Shark" franchise has experienced a dramatic collapse, plummeting by approximately 90% after its creator, Pinkfong, officially denied any affiliation with the token. The coin, launched on the Story Protocol network, saw its market capitalization skyrocket initially before crashing down following the brand owner's statement.
Key Takeaways
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A "Baby Shark"-themed meme coin lost over 90% of its value.
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Pinkfong, the company behind "Baby Shark," stated it has no affiliation with the token.
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The coin was launched on Story Protocol, a platform for managing intellectual property rights.
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Story Protocol has since deleted promotional posts related to the token.
Unsanctioned Launch and Rapid Decline
The meme coin, which leveraged Story Protocol's infrastructure for intellectual property management and derivative works, was issued "without authorization," according to Pinkfong. The entertainment company, responsible for the viral "Baby Shark" song with billions of views across YouTube, issued a statement on X (formerly Twitter) warning of "grave legal consequences" for unauthorized use of its intellectual property.
Initially, the token experienced a meteoric rise, reaching a market capitalization of $519 million shortly after its launch. However, this surge was short-lived. Following Pinkfong's denial, the token's value plummeted, trading significantly lower and leaving many investors with substantial losses.
Story Protocol's Role and Controversy
Story Protocol, designed to facilitate the creation of derivative works and manage IP rights, found itself at the center of the controversy. Posts from Story Protocol, including one from its co-founder and CEO S.Y. Lee, suggesting excitement about the tokenization of Pinkfong's IP, were deleted. While Story Protocol stated it was not a party to the licensing agreements and had little to do with the core issue, the incident has drawn scrutiny to the platform's user verification processes.
IP.World, the platform through which the unofficial token was launched, acknowledged that it relied on faulty rights provided by a Pinkfong licensee. They stated that their verification process ultimately blocked creator fees from being released, but admitted that the community had reason to believe the launch was authorized. Pinkfong has officially endorsed only two other meme coins, both existing on the Solana and BNB Chain networks.
Insider Trading Allegations
Further complicating the situation, blockchain analytics firm Bubblemaps reported evidence of insider activity around the meme coin. They identified that approximately 7% of the token's supply was acquired by a single entity through multiple new wallets within the first minute of trading, raising questions about pre-launch knowledge and market manipulation.