A Baby Shark token that launched on Story Protocol has crashed over 90% after entertainment company Pinkfong denied any official connection to the project. The token had reached a peak market cap of $200 million before the dramatic collapse.
The unauthorized meme coin was issued through IP.World platform, which claimed to work with a licensed Pinkfong partner. However, the licensing partner later admitted it lacked proper authority to create the token.
Pinkfong stated that only two official tokens exist on approved blockchain networks. The company threatened legal action against unauthorized use of its intellectual property.
The token dropped from Tuesday's high of 35 cents to under 6.4 cents following Pinkfong's Friday announcement. Story Protocol deleted promotional posts about the collaboration after the brand owner's denial.
IP.World defended its verification process, saying creator fees remained locked until proper authorization could be confirmed. The platform called the incident frustrating but highlighted its built-in #safeguards.
On-chain analysis revealed potential insider trading, with approximately 7% of the token supply purchased immediately after launch. No direct connection to Story Protocol was found in the suspicious activity.
The collapse sparked scrutiny of Story Protocol's IP management system. The platform's native token STORY fell from $12.91 to $7.24 amid the controversy before recovering to around $9.35.
The incident demonstrates risks in #tokenization of intellectual property without proper licensing verification. Legal consequences may follow for parties involved in the unauthorized launch.