Saitama Inu: What Happened?

Saitama Inu is a meme coin that over-promised and ultimately under-delivered, leaving many investors out of pocket and an ongoing lawsuit with the SEC.

What is Saitama Inu?

Saitama Inu is a memecoin, based on the popular One-Punch Man manga series and named after the main character, Saitama.

The memecoin is an Ethereum‑based ERC‑20 token launched in May 2021 with a focus on financial education and community empowerment.

The token, now relaunched, faced criticism from its community over the tokenomics and development of the project, as well as legal difficulties in the US.

Read next: Best Memecoins

Saitama Inu tokenomics

Saitama used deflationary tokenomics, meaning the token supply decreased over time. Here's how it worked:

• 2% reflection mechanism: Every transaction automatically redistributes 2% of its value back to all existing holders. This rewards holders just for keeping the token.

• 2% burn: Another 2% of each transaction is sent to a “dead wallet,” permanently removing it from circulation. This reduces supply and is intended to create upward price pressure over time.

Saitama Inu tokenomics is key to understanding what went wrong with the token.

Saitama Inu ecosystem

To build real-world use cases and drive demand, the Saitama development team promised several components under the broader "Saitama Ecosystem":

1. SaitaPro (formerly SaitaMask): A non-custodial crypto wallet with built-in DEX functionality and educational tools.

2. SaitaSwap: A decentralized exchange allowing users to trade Saitama and other tokens directly.

3. SaitaRealty: A real estate investment token aimed at integrating DeFi with real-world property markets.

4. SaitaChain: A layer-2 blockchain developed to provide a more scalable infrastructure tailored to the ecosystem.

5. Saitama Studios: Focused on producing games, entertainment content, and NFTs, adding a creative aspect to the project.

To date, none of these projects have been fully realised… so what happened?

What happened to Saitama Inu?

The rise and fall of the Saitama Inu token can be broken down into some key events:

1. Massive initial supply + reflection burns

At launch, Saitama Inu had an enormous circulating supply. Its draw was that every sell transaction burnt a tiny share of tokens, which were then redistributed to holders. Early adopters saw astronomical returns, making millionaires overnight for a lucky few.

2. Whale concentration & gradual liquidity drain

Behind the scenes, the devs and insiders held huge token amounts. The reflection mechanism sent them tokens each day, free airdrops directly to whale wallets. Meanwhile, these holders sold regularly, draining liquidity slowly.

3. Vegas hype event

In November 2021, Saitama threw a flashy event in Las Vegas (MGM Grand), complete with private jets, influencers, drunk devs, and strippers. However, no real platform or tech was showcased. Instead, it triggered panic; the price dropped over 50% in one night as holders rushed to exit.

4. Sham partnerships & repeated dumps

After Vegas, the team partnered with another questionable project (Lilly Finance), boosted by insider hype, only for it to flop again with a price crash. Attempts to distract, like calling out Binance’s CZ or urging the community to spam tweets, only highlighted the lack of substance.

5. Rebase to V2 contract – insiders first

The team launched a V2 token with a much lower total supply. But insiders received V2 tokens first and cashed out quickly, abandoning ordinary holders. Many never even received their swapped tokens.

6. Ex-drama & spending spree

To add insult to injury, the ex-wife of lead dev Russell went public, claiming he spent project funds on cocaine and strippers. He also bought flashy items like a black Lamborghini while holders watched the token plummet 98% from its peak.

Overall, Saitama’s tokenomics cleverly masked a classic slow rug-pull:

• Get whales on board via reflection burns

• Hide behind hype and flashy events

• Insiders exit gradually via tokenomics and contract migration

• Leave everyday investors with hollow promises and negligible value

What started as a “reflection token” wrapped in educational and DeFi ambitions turned into a well-orchestrated exit, complete with hype noise, contract swaps, and dev profiteering. The V2 swap sealed the deal, insiders cashed out, while most investors were left with almost nothing.

Read next: Rug Pulls Guide

Saitama Inu vs. the SEC

To add to the project’s issues, in October 2024, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Vy Nguyen Pham, a key promoter of the project, accusing her of engaging in fraudulent activities and selling unregistered securities. 

According to the SEC, Pham used social media to pump the value of the token through misleading statements and false promises. This artificial hype reportedly led to a dramatic price increase, after which Pham is alleged to have sold her holdings for significant profit, leaving retail investors with substantial losses when the token's value collapsed.

The SEC alleges that SAITAMA was marketed and sold as a security, and that Pham’s promotional activities, framed as community-building and project updates, were actually part of a deceptive strategy to mislead investors. The regulator claims that she violated several securities laws, including those prohibiting fraud and unregistered sales of investment contracts.

This enforcement action is part of a broader campaign by U.S. regulatory bodies, including the Department of Justice and the FBI, to crack down on deceptive and manipulative practices in the cryptocurrency sector. These agencies have been targeting similar schemes that rely on social media influence and aggressive marketing to drive token prices before insiders exit positions.

Given the change in administration to the Trump administration, it’s not clear whether this case will continue as other similar cases have been dropped.

Read next: SEC & Crypto

What’s next for Saitama Inu?

As of May 2025, the project has been relaunched as Saitama Reborn, with simplified tokenomics more akin to a standard memecoin. It is unclear who is involved in the relaunch.

Don’t forget the tax bill…  

A final note, if you have losses from Saitama investments, these are actually good news for your tax bill, provided you can realize them. 

To realize losses, you need to dispose of your tokens, which can be difficult when the token is illiquid, but there are a few options:

• Sell or trade your tokens if possible, even if for a negligible value.

• Gift your tokens (depending on where you live, this is a disposal)

• Send your tokens to a burn wallet

Once you’ve realized your loss, you can use this loss to offset any gains and reduce your overall tax liability. No gains to offset? You can also carry losses forward to future years or sometimes even offset them against ordinary income, depending on where you live.

Koinly can help you track your gains, losses, income, and more from crypto, including your unrealized losses with our tax optimization tool. Try it free today.