Influencers Logan, Jake Paul under increasing scrutiny for cryptocurrency dealings
YouTube investigative muckraker Coffezilla, one of the first to expose fallen crypto king Sam Bankman-Fried's alleged misdeeds, was also one of first to sound the alarm about Paul brothers' crypto dealings.
The Facts Inside Our Reporter’s Notebook
- "effective altruism"m
- $16 billion
- top donors
- 155 years
- a YouTube channel
- 24.6 million followers
- 21.5 million
- 20,000 different cryptocurrencies
- absolutely worthless
- a key role
- question his motives
- previously noted
- no actual utility
- Bloomberg Law
- credible reports
- sued for their participation
- professional boxer
- millions of dollars
- absolutely nothing
- openly promoted
- a scathing piece
- rocketing by 40,000%
- Kim Kardashian
- crypto-themed creation
- pay-to-earn game
- to Coinbase
- unique tokens
- a new video
- $335,1158.115 USD
- making demeaning jokes
- apologized profusely
- World Wrestling Entertainment
It's official: Sam Bankman-Fried, once the boy-wonder of the crypto world, has been extradited to the U.S., where he will face fraud charges over the collapse of FTX, the cryptocurrency exchange he oversaw.
A proponent of "effective altruism," Bankman-Fried, once worth $16 billion, finds himself charged with eight crimes, including money laundering and wire fraud. One of the Biden campaign's top donors, the 30-year-old faces up to 155 years in prison for allegedly swindling investors.
Bankman-Fried, however, isn't the only influential cryptocurrency figure accused of committing various crypto-related sins. There are also Logan and Jake Paul, two brothers with a significant social media presence.
Logan, 27, the elder of the two, has a YouTube channel with almost five million subscribers. On Instagram, he has 24.6 million followers. Meanwhile, Jake, 25, has 21.5 million followers and a very popular YouTube channel of his own. When it comes to influencers and genuine influence, the brothers are two of the biggest names in the business. Both find themselves accused in civil court pleadings of knowingly participating in numerous cryptocurrency scams and misleading potential investors.
Today, there are more than 20,000 different cryptocurrencies in existence, the vast majority of which some experts deem absolutely worthless. The two biggest cryptocurrencies are Bitcoin and Ethereum. The former, the first-ever cryptocurrency created, arrived in 2009; it is the largest cryptocurrency by market cap. Witnessing the explosion of Bitcoin and, to a lesser extent, Ethereum, some decided to create questionable coins of their own and market them to the masses.
Over the past few years, YouTube investigative muckraker Coffezilla, real name Stephen Findeisen, has played a key role in highlighting a range of alleged crypto-related scams. He was one of the first to expose Bankman-Fried's alleged misdeeds and question his motives. He was also one of the first to sound the alarm on the aforementioned Paul brothers.
Earlier this year, as Findeisen previously noted on his own YouTube channel, Jake Paul was threatened with legal action over his promotion of Safemoon, a cryptocurrency critics say has no real-world utility. Since Safemoon's creation in March of 2021, investors have "lost hundreds of millions of dollars," as Bloomberg Law first reported. Moreover, according to reports, the crypto's parent company, SafeMoon LLC, allegedly failed to register the tokens as securities with the U.S. Securities and Exchange Commission.
In February, Paul and a host of other notable celebrities, including the singer Nick Carter and the rapper Lil Yachty, were sued for their participation in the project. Jake Paul was, up until very recently, one of Safemoon's leading spokespeople. The media personality and professional boxer has participated, Findeisen alleges, in at least five different scams, raking in millions of dollars in the process.
Jake's brother Logan, meanwhile, is also heavily involved in the crypto space. In June of 2021, the world was introduced to Dink Doink, a cryptocurrency he openly promoted that is currently worth absolutely nothing.
Shortly after Dink Doink appeared and Logan Paul began promoting it, InvestorPlace's William White wrote a scathing critique of the crypto. Dink Doink, he noted, is good for "absolutely nothing." Paul, he alleged, appeared to be participating in a classic pump and dump scheme, in which an individual or individuals spread misleading information in the hope of creating a buying frenzy that artificially "pumps" up the price of the asset.
One tweet, sent out on June 29, 2021 of last year by Paul to his 6.7 million Twitter followers, resulted in Dink Doink's value rocketing by 40,000%. Soon after the astronomical rise, it crashed in value.
To date, the FTC has not brought any civil claim against either brother nor referred either to the DOJ for criminal action.
Logan Paul then shifted his focus to a new crypto-themed creation, Crypto Zoo, a pay-to-earn game. Crypto Zoo allows users "to breed, collect, and trade exotic animal hybrids on the blockchain," accordin to Coinbase. "In the ecosystem of CryptoZoo, each animal is a non-fungible token." For the uninitiated, blockchain is the underlying technology powering Bitcoin and other cryptocurrencies. Non-fungible tokens (NFTs), meanwhile, are unique tokens designed to authenticate ownership of solely digital assets.
Ostensibly designed to be a fun game that makes money for its users, Crypto Zoo has seen thousands of people lose inordinate sums of money. On Dec. 19, Coffeezilla released a new video in which he interviews a number of users who claimed to have lost tens of thousands of dollars from Crypto Zoo. One man asserted that he lost $500,000 Australian dollars ($335,1158.115 USD).
Logan Paul is no stranger to controversy. In 2018, during a visit to Aokigahara Forest (also known as the "Suicide Forest") on Mount Fuji, Japan. Paul and his film crew discovered a dead body hanging from a tree. As his crew filmed the sight, Paul began making demeaning jokes about the dead man. Since then, he has apologized profusely for his actions.
As a newly-minted member of the World Wrestling Entertainment industry, Paul appears to have redeemed himself in the eyes of the public. But don't expect Coffeezilla and others to let up in their scrutiny of Logan or Jake Paul's crypto dealings.
Just The News reached out to both brothers for comment. At the time of publishing, neither had offered a response.
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