As a seasoned observer of the ever-evolving world of finance and entertainment, I find myself constantly intrigued by the intersection of these two realms, particularly when it comes to celebrities and their involvement in cryptocurrencies.
Besides MrBeast, other well-known figures are also linked to a suspected crypto manipulation strategy known as pump-and-dump.
In at least nine instances, Crypto.news uncovered situations where celebrities or influential figures endorsed a cryptocurrency to investors. However, they would later sell their holdings at a higher value, causing the digital asset’s price to plummet. This led to substantial financial losses for the other investors – frequently their followers.
Generally speaking, many star-backed ventures tend to lose momentum swiftly following their debut. However, there are exceptions that catch the attention of authorities, serving as a reminder for investors to do due diligence before jumping on board with high-profile endorsements. Here’s our compilation starting with Donaldson.
Table of Contents
MrBeast
On Tuesday, it was alleged that Jimmy Donaldson, also known as MrBeast, made millions through dubious cryptocurrency transactions.
Specialists from the consultancy firm Loock.io, along with blockchain analysts such as SomaXBT, who earlier alleged that Donaldson gained $10 million through small-market tokens, now assert that MrBeast exploited his sway to engage in illicit insider trading for personal profit.
Based on findings from a team of digital researchers, it appears that Donaldson, with an impressive following of over 320 million on YouTube, leverages his influence to publicize certain tokens. Subsequently, there are indications that he sells these tokens in the market afterward.
Besides cryptocurrencies, Donaldson is also well-known for endorsing various food items such as “Beast Burgers” and “Lunchly.” Critics have pointed out questionable quality standards associated with these products.
Logan Paul
Logan Paul, collaborating with MrBeast on the platform Lunchly, is additionally recognized as a well-known YouTube personality who often engages in contentious antics and endorses various products, such as his personal energy drink line, Prime.
Among his more memorable missteps was his association with CryptoZoo, an online game based on non-interchangeable tokens (NFTs). In this game, players purchase digital eggs that eventually hatch into various animals, which could then be traded or sold among users. The idea was that these NFTs might increase in value, potentially allowing players to make a financial gain.
After an initial burst of sales and promotions, the project lost momentum, resulting in most investors being left with NFTs that had no significant value.
Various critics, such as YouTube’s Coffeezilla, have raised concerns that Paul and his associates may have mishandled the project and potentially deceived investors.
In due course, Paul countered the accusations, attributing the problems to third-party programmers and vowing to tackle the issues, albeit the project’s standing continues to be debated.
Kim Kardashian
A lawsuit that accused Kim Kardashian and other celebrities of promoting a crypto “pump-and-dump” scheme tied to EthereumMax (EMAX) was dismissed by a federal judge in late 2022.
As an analyst, I can share that allegations were made against me for deceiving the public by endorsing EMAX, a cryptocurrency that has virtually no value now. However, in court, it was determined that these accusations failed to meet the stringent requirements for securities fraud, implying that the presented evidence lacked the substance needed to further pursue the case.
After her prior agreement with the SEC, which involved paying a fine of $1.26 million for not disclosing she was compensated $250,000 for endorsing EMAX, Kardashian was subsequently let go.
As part of the settlement, she also agreed to avoid endorsing any crypto products for three years.
In this scenario, the plaintiffs were allowed to continue with an appeal, yet the case emphasized the intricate legal and moral challenges associated with influencer marketing within rapidly fluctuating sectors such as cryptocurrency.
Floyd Mayweather
2022 saw financial authorities accuse Floyd Mayweather Jr., the unbeaten boxing legend, of not revealing his earnings from endorsing three Initial Coin Offerings (ICOs). Among these were a $100,000 commission from Centra Tech.
It’s been claimed that he utilized his social media account to motivate his followers to join Centra’s Initial Coin Offering (ICO), suggesting that it was about to start and they should acquire the tokens before they ran out of supply.
Nevertheless, Centra Tech was exposed as a fraudulent enterprise. The trio behind it – Sohrab Sharma, Raymond Trapani, and Robert Farkas – faced charges from regulatory bodies for deceiving investors by making baseless claims about partnerships with well-known companies such as Visa and MasterCard. Additionally, authorities accused the company of misleading investors regarding the technology and feasibility of their debit card product.
The well-known blockchain investigator ZachXBT voiced substantial criticism towards Mayweather’s participation, citing several instances where the boxer’s fans had lost large sums of money by investing in fraudulent schemes. One such instance was the EthereumMax, which received backing from the Kardashians.
Is it fair to give Floyd another opportunity, considering he’s amassed fortunes totaling tens of millions from his investments in Mayweverse, Ethereum Max, Bored Bunny, Real Floyd NFT, Moonshot, 2018 ICOs, and more?
— ZachXBT (@zachxbt) June 2, 2024
DJ Khaled
DJ Khaled, whose real name is Khaled Mohamed Khaled, also promoted Centra Tech on social media.
Similar to Mayweather, Khaled was accused of not revealing that they had been compensated to endorse the Initial Coin Offering (ICO), a practice that went against anti-endorsement regulations.
In 2018, Khaled reached an agreement with the U.S. Securities and Exchange Commission (SEC), paying a fine of $152,725. This amount was a combination of money he had earned and additional fees. On the other hand, Mayweather paid over $600,000 in a similar settlement.
Apart from that, Khaled likewise consented not to advertise any securities over the course of two years. This instance served as one of the Securastic Commission’s (SEC) early measures against celebrity endorsements within the crypto sector, thereby establishing a standard for transparency and responsibility in such promotions.
Soulja Boy
The hip-hop artist and online trendsetter faces charges from the Securities and Exchange Commission, as they claim he failed to reveal that he received payment for endorsing TRON (TRX) and BitTorrent (BTT) on social media.
Soulja Boy, together with other prominent figures, encountered a wave of legal issues since they persisted in endorsing different cryptocurrencies and Non-Fungible Tokens (NFTs), despite the potential hazards involved.
Jake Paul
YouTube personality and boxer Jake Paul, who is the sibling of Logan Paul, has been sued due to claims that he failed to reveal his financial ties when promoting the cryptocurrency SafeMoon.
SafeMoon’s value dropped sharply after promotions by Paul and other celebrities.
Beyond this point, another noteworthy instance involves my connection with the Save the Kids initiative, a cryptocurrency endeavor that asserted its purpose was to fund charitable undertakings.
The project encountered strong criticism and investigation after accusations surfaced that Paul and other individuals artificially increased the token’s value by promoting it and later selling their shares, causing a steep drop in its worth, resulting in considerable financial losses for the investors.
Paul denied any wrongdoing.
Lindsay Lohan
2023 saw Lindsay Lohan, along with Jake Paul and others, being accused by the Securities and Exchange Commission of failing to disclose properly when they endorsed TRX and BTT tokens issued by the Tron Foundation.
The case highlighted that she and others were paid to endorse these tokens.
However, it’s been revealed that Lindsay Lohan frequently endorsed cryptocurrency ventures and NFT collections on social media platforms. A leaked document posted by ZachXBT on social media hints at the actress charging around $25,000 to endorse projects or approximately $20,000 for a retweet.
This action attracted unfavorable interest from the Securities and Exchange Commission (SEC), who alleged that she was artificially inflating the value of Justin Sun’s Tron and BitTorrent tokens.
She ultimately settled the SEC charges, and joined the likes of Ne-Yo and Akon in paying a combined $400,000.
Paul Pierce
Previously renowned basketball player endorsed EthereumMax on various social platforms back in 2021, failing to reveal any monetary compensation similar to Kardashian and Mayweather. Later, Pierce faced legal action from the SEC in 2023, resulting in a fine of $1.4 million.
A lawsuit claims that these celebrities participated in a manipulative trading practice called pump-and-dump. This scheme allegedly involved promoting a cryptocurrency named EMAX to artificially increase its price, after which they sold off their shares, causing substantial losses for unsuspecting investors who followed their endorsements. Despite their denials of any wrongdoing, the potential legal ramifications of their promotional activities have sparked discussions about the impact of celebrity influence on the crypto market.
The tightening of regulations on EMAX was an expansion of a larger initiative aimed at examining the role of celebrities in endorsing digital currencies. This incident has brought into focus the legal obligations that influencers hold when they advertise financial items.
Andrew Tate
YouTube personality Coffeezilla, recognized for unmasking fraudulent activities, is currently engaged in a public disagreement with self-proclaimed misogynist Andrew Tate concerning the former’s evolving views on cryptocurrency.
Coffeezilla posted old videos featuring Tate, who in the past had written off cryptocurrency as valueless and swore he wouldn’t exploit fans by introducing coins. However, Tate has since advertised numerous meme tokens, such as “ROOST” and the “F Madonna token.” Notably, these digital assets saw substantial drops in value soon after Tate’s endorsements.
Additionally, Coffeezilla pointed out Tate’s endorsement of the “Real World Token,” a digital currency associated with his online course. This setup appears similar to a multi-level marketing scheme, where participants accrue tokens symbolizing their potential earnings.
In 2022, Tate, accused of human trafficking in Romania, has persistently asserted his innocence amidst growing public interest in his ongoing legal predicament.
Read More
Sorry. No data so far.
2024-11-03 15:33