Irene Zhao's "Asianmom" Crypto Scandal - Can Failed Project Founders Ever Make a Comeback?

It's never easy to start a project from scratch but it's even more challenging when you have an unfortunate history of unsuccessful projects.

One crypto influencer who has suffered the wrath of the community recently is Irene Zhao, whose Jupiter-collab memecoin project, Asianmom, has been branded a scam.

According to Jupiter, the memecoin will follow a new framework promoting the principles of certainty, alignment, and transparency in response to the current meta of bot sniping, opaque dev allocation, and pump and dumps. Initial liquidity providers will get in cheaper, aligning long-term incentives.

Mother Rugger

Immediately after the announcement of the Asianmom project, several users expressed their dissatisfaction. Famed Crypto Twitter user ZachXBT, renowned for calling out scams in the crypto space, was one of the biggest names to call Zhao out.

He alleged that Zhao did a secret deal with DWF labs, as the founder of SO-COL (SIMP), of which the terms were not disclosed and the community had zero knowledge, essentially "rugging" all the early investors.

A screenshot posted by ZachXBT revealed that one investor was not pleased with the DWF deal, claiming that it would drive SIMP to almost zero, making it hard to onboard creators. According to ZachXBT, there were tons of messages from angry investors from the chats when Zhao was posting on X.

Others in the community were also quick to point out that besides SOCOL, Zhao was also a Chief Marketing Officer for Konomic Network (KONO). Both projects experience a substantial drop in prices, with SIMP down 98.9% and KONO down 99.9%.

Controversy #1: SOCOL

Firstly, what is SOCOL? According to their whitepaper, SOCOL is focused on making NFTs accessible and affordable for everyone, as well as a web3 social app for creators and communities.

SOCOL seeks to disrupt the creator economy by being the all-in-one platform where creators can unite their communities and give their audiences a stake in the community through utility-based NFTs.

"Fans that are already spending a lot of time and money simping for creators," Zhao explained to Blockhead back in 2022. "By holding an NFT of the creator, fans can tell people that they’re a superfan. You can say you were there for the partnerships and proposals; it’s proof you’re a superfan. It’s also much easier for celebrities to interact with the fans!”

Riding on this mission, SOCOL managed to raise total funding of $6.3 million, with May's 2022 round valuing the project at $100 million.

As per the tokenomics, the native token for SOCOL, SIMP acts as a governance token, allowing holders to vote on governance proposals. Besides staking for rewards, holders of SIMP can also participate in marketing campaigns to earn airdrops of SIMP or other tokens.

Listed on Kucoin in January 2023, the total supply for SIMP was set at 1,000,000,000 with an initial circulating supply of 49,000,000 which represents 4.9% of the total supply available upon the Token Generation Event (TGE). With a listing price of $0.03, this represents a market capitalization of $1.47 million and a Fully Diluted Valuation (FDV) of $30 million.

Investors are subjected to vesting over 15 months after the initial 3-month cliff while the teams' token is vested over 24 months after a 12-month cliff period. Given the vesting schedule, it is hard to argue that the project was designed to rug or scam investors from the start as some might have suggested on Twitter. However, it is important to note the low circulating float and the valuation at which the project was launched.

SIMP traded to the upside immediately after listing, peaking at $0.1090 before eventually trading below the listing price after a few months. Despite having a staking feature, there were no additional buyers for SIMP. By the time the 3-month cliff had ended, prices had already dropped around 70% below the listing price.

On-chain data also suggested that DWF labs sold their SIMP token in March 2023 when the tokens supposedly had a one-year vesting period ending in Feb 2024, further adding to the controversy. This is also corroborated by Coindesk stating that DWF's crypto wallet received 3.3 million SIMP tokens between March 6 and March 24 of which 2.6million tokens were sent to Kucoin.

At the time of writing, the website for SOCOL (socol.xyz) is not available and SIMP's market capitalization is around $450k and has an FDV of $900k.

Irene's Response to Controversy #1: SOCOL (SIMP)

Zhao clarified the situation on X, stating that she should have been more transparent about the difficult situation she was facing and should have sought existing investors' opinions before agreeing to new deals.

However, at that time, she said she truly believed that accepting funding from DWF was the only solution to save the project and it was never her intention to rug or scam anyone.

Zhao further added that after the price surge when the deal with DWF was announced, they ended up pausing the investment deal after early investors took issue with the deal. Perhaps this has something to do with DWF selling the tokens before the 1-year vesting.

As a founder, she takes full responsibility for her failure to build the right team and to find product-market fit for the web3 creator economy.

Controversy #2: Konomi Network (KONO)

Konomi Network is a full-suite asset management solution for cross-chain crypto assets launched on the Polkadot network of which Zhao served as Chief Marketing Officer, organizing AMAs and ecosystem partnerships. KONO has seen prices fall from $4.63 to $0.006562 at the time of writing, with some in the community associating the blame to her.

"The crypto industry has always treated these scammers so leniently, is it just because she's better looking? No one ever seems to remember how many people she scammed while working with them," said one disgruntled X user.

Irene's Response to Controversy #2: Konomi Network (KONO)

Zhao clarified that she had no involvement in the development, operations, or management in any way, adding that she should have done a better job in explaining her role in the project.

"I should have been a lot more conscious about my past projects. For example - explaining my role in Konomi better, since a lot of them bought because of my presence" said Zhao in an exclusive interview with Blockhead.

Controversy #3: Unoffcial Memecoin (IRENE)

A developer launched a meme coin on memecoin site pump.fun two months ago using ticket IRENE, causing users to think that the token was related to her. IRENE's price has fallen more than 50% over its brief lifespan thus far.

However, as memecoins by nature are speculative, akin to gambling, users should always abide by "DYOR" before committing to it. A quick search would have revealed that it was not the real Irene behind the token, users blaming her for the loss because they did not do any research do not seem to be fair towards her.

Irene's Response to Controversy #3: Unofficial meme coin (IRENE)

"I didn’t address a lot of the meme coins that launched based on my brand nor clarify that I wasn’t involved in them - causing a lot of people to buy them mistakenly," Zhao told Blockhead.

"What I want to do is to create a new meme coin meta, to invest my time, effort and energy into cultivating real relationships and community and that's why I decided to work with Jupiter because we have aligned vision," she added.

Comeback Challenge

In an industry that is already known for scammers, transparency is of utmost importance, especially for founders. Given the nature of blockchain, most transactions can be eventually traced anyway and hence it is even more crucial for founders to be transparent regarding their past.

Influencers should also be more explicit about their role in any project they associate with, especially if they have no actual involvement in the operation or management of the project as is the case with Zhao for the KONO Network. Given their huge reach and following, some followers may simply buy the tokens due to the influencer's association.

According to Zhao, some investors in SOCOL initiated the idea of launching a memecoin in March this year. Under the new framework by Jupiter, will it be enough to escape the fate of the countless celebrity meme coins that have lost most of their value?

Zhao revealed to Blockhead that she is committed to the Asiamum project and wants to do it the right way.

"The fact that I have been the target of many rug coins and also my own experiences have taught me the importance of transparency and community trust," she said.

"That’s why I’m committed to do this project the right way. I’m also very good at creating constant engagement and rallying a community from previous experiences, I think that’s what a meme project needs the most."

Ultimately, just because the project did not perform well does not constitute a scam. Despite the performance of SIMP, it is not fair to compare a utility or governance token against a meme-coin. Memecoins are of a different category - they are meant to have no utility and are purely attention-seeking instruments. Zhao has demonstrated her ability to garner attention and engagement given her past.

This are currently no planned dates for the meme coin but it remains to be seen how the Asianmom memecoin will be received given how divisive the community response is.

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