Logan Paul accused of misleading fans over crypto investments

Logan Paul, the influential social media star, is facing growing scrutiny over his involvement in cryptocurrency promotions amid accusations that he misled his fans to profit from crypto investments. Evidence gathered by the BBC suggests that Paul promoted certain cryptocurrencies without disclosing his financial interests, potentially causing the value of those coins to spike, allowing him to sell tokens at a profit.

Logan Paul, who has over 23 million followers on YouTube, has already attracted significant attention for his role in crypto ventures, and he now faces a lawsuit over his failed project CryptoZoo. This has led to further questions about whether he misled his audience for personal gain.

The BBC’s investigation uncovered that, before Paul tweeted about a specific cryptocurrency in 2021, an anonymous wallet connected to Paul’s public wallet made a $120,000 profit from trading in that coin. The crypto wallet received funds from Paul’s public wallet, purchased and traded the crypto, then sold its holdings after Paul’s tweet, making a significant profit.

The BBC’s findings came after similar reports were published by Time Magazine, which identified another case involving an anonymous wallet linked to Paul’s promotion of a different cryptocurrency. However, when approached for comment, Paul initially refused to respond and later invited the BBC for an interview, but the meeting was disrupted by a lookalike impersonating Paul. Shortly afterward, the BBC received a legal letter warning against publishing the findings.

Paul’s venture into cryptocurrency began around 2021 when he began promoting high-risk “meme coins”—cryptocurrencies often inspired by internet jokes or memes with no real-world value. One of these was Elongate, a token linked to Elon Musk. Following a promotional video by Paul, the price of Elongate surged by over 6,000% before plummeting shortly after. While the exact intent behind Paul’s promotion remains unclear, it seems likely that his influence played a significant role in the coin’s brief rise.

In another instance, Paul promoted the meme coin Dink Doink, which featured a cartoon character. After Paul’s endorsement, the price spiked before crashing as large holders began selling. The BBC also uncovered evidence suggesting that an anonymous wallet had purchased Dink Doink before Paul’s promotion and later transferred $100,000 to his public wallet. Paul’s legal team acknowledged he traded Dink Doink but insisted he only made $17,000, rejecting any connection between the $100,000 transfer and Dink Doink.

Paul’s actions are part of a broader pattern seen in the crypto world, where celebrities are often accused of failing to disclose financial stakes in cryptocurrencies they promote. In 2022, Kim Kardashian faced a fine for promoting EthereumMax on Instagram without revealing that she was paid for the promotion. The U.S. Securities and Exchange Commission (SEC) mandates that influencers disclose whether they are paid to promote crypto tokens, whether they own the tokens, or if they profit from the promotion.

Logan Paul’s involvement in cryptocurrency extends beyond promotions. His project, CryptoZoo, marketed as a digital trading card game using non-fungible tokens (NFTs), was expected to bring significant returns to investors. However, the game faced severe technical issues, and the value of its associated tokens, Zoo Tokens, collapsed. Around 130 investors are suing Paul, claiming they lost $4.2 million. They allege that Paul and his team used insider trading tactics to manipulate the token’s value. Paul has denied these accusations, instead blaming other members of his team for the project’s failure and the technical issues.

Despite the controversies surrounding him, Paul has maintained his popularity. Recently, he expanded his career into boxing and wrestling, and launched a successful drink company, Prime, alongside British influencer KSI. Prime became a viral sensation, generating massive demand and leading to a thriving resale market.

However, not all of Paul’s fans share his enthusiasm. Rueben Tauk, a CryptoZoo investor, shared his disappointment, having lost £33,000 in the failed project. “Once you listen to someone and trust what they’re saying and they betray that trust, their words don’t mean anything to you anymore,” Tauk said, highlighting the personal toll the failed crypto ventures have taken on his trust in Paul.

In conclusion, Logan Paul’s foray into the cryptocurrency world has raised concerns about influencer accountability and the ethical implications of promoting investments without transparency. While Paul denies any wrongdoing, the growing number of lawsuits and investigations suggest that his relationship with crypto may tarnish his reputation for good.