When one thinks of cryptocurrencies and criminal behaviour, the name Sam Bankman-Fried, once the boy-wonder of the crypto world, instantly springs to mind.
In December 2022, the alleged perpetrator of “one of the biggest financial frauds in US history” was extradited to the US.
Later this year, the 31-year-old, currently under house arrest, will face fraud charges over the collapse of FTX, the cryptocurrency exchange he oversaw.
But Bankman-Fried isn’t the only highly influential figure being questioned by the public over their promotion of various crypto-related projects.
There’s also Logan Paul, an American social media influencer and professional wrestler.
Paul is a popular figure; in truth, he’s an insanely popular figure.
The 28-year-old, who recently got engaged to model Nina Agdal, has 23.6 million YouTube subscribers, 25.9 million followers on Instagram and 17.7 million followers on TikTok.
But as the WWE superstar prepares to walk down the aisle, he finds himself accused online of creating a questionable cryptocurrency.
Two years ago, the world was introduced to Dink Doink, a cryptocurrency that currently boasts a market capitalisation of exactly $0.
Not long after Dink Doink appeared and a very enthusiastic Logan Paul began promoting it, InvestorPlace’s William White wrote a scathing critique of the worthless (quite literally) cryptocurrency.
Dink Doink, he wrote, is good for “absolutely nothing”.
Paul, alleged White, appeared to be participating in a classic pump and dump scheme that artificially “pumps” up the price of the asset.
Initially, thanks to Paul’s promotional efforts, Dink Doink’s value rocketed by 40,000 per cent. Soon after the astronomical rise, Dink nosedived in value.
To date, it’s important to note that the US Federal Trade Commission (FTC) hasn’t referred the influencer to the US Department of Justice (DOJ) for criminal action.
Soon after Dink’s death, Paul shifted his focus to Crypto Zoo, a crypto-themed, pay-to-earn game.
Crypto Zoo enables users “to breed, collect, and trade exotic animal hybrids on the blockchain”, according 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 thousands of other cryptocurrencies. Non-fungible tokens (NFTs), which also exist on a blockchain, are unique tokens designed to authenticate ownership of solely digital assets.
Ostensibly designed to be a bit of fun that lets users make money, CryptoZoo has turned out to be an utter nightmare.
The game has seen thousands of people lose inordinate sums of money. I was alerted to this by Stephen “Coffeezilla” Findeisen, YouTube’s answer to Magnum P.I.
An investigator of epic proportions, Coffeezilla is an expert at identifying and exposing potential online scams.
On December 19 2022, Coffeezilla released a sensational video in which he interviewed a number of users who claimed to have lost tens of thousands of dollars from CryptoZoo.
Rather incredibly, one man said that he lost $US335,000 ($A500,000). The video went viral. People were outraged.
On January 13, Paul, no longer able to hide from the uproar, released a video of his own, discussing his “plan” to reimburse all those affected.
Six months on from the video, Paul’s “plan” is yet to take off. Not one of the many people affected have been compensated.
Coffeezilla, a man I got comment from for this piece, has spoken to the victims.
“The last time Logan communicated with them was in January,” he told Decrypt.
“According to the victims,” he said, “there [have] been zero payments. There’s no excuse for this. Logan made a public statement about this, took credit for it, and has ghosted the victims.”
Coffeezilla told me that, although the amount of people affected is hard to calculate, “the NFT sales alone were 10,000 units”.
“But the number of actual holders of the zoo coin is much larger, coming in at 19,405 unique addresses,” he continued.
So, if Paul was to make things right, how much would he have to pay?
“Just to make the NFTs right you’re looking at $3.6 million that was spent on launch day by Logan fans,” said Coffeezilla.
“He has screwed tens of thousands of people, and refuses to even pay a partial refund to a subset of his victims.”
Paul has repeatedly denied any wrongdoing and has also promised that “all deserving parties” would eventually be reimbursed.
Decrypt says Paul – currently worth a cool $245 million – doesn’t just owe CryptoZoo buyers money – he also owes Zach Kelling, CryptoZoo’s chief engineer, more than $1 million in fees for his work.
This is not Logan Paul’s first time at the controversy rodeo.
In 2018, during a visit to Aokigahara Forest (also known as the “Suicide Forest”) on Mount Fuji, Japan, the then-24-year-old and his film crew discovered a body hanging from a tree.
While the crew filmed the sight, Paul proceeded to make a number of demeaning jokes about the deceased man.
Since then, he has apologised profusely for his behaviour.
Although it’s true that most people deserve a second chance, how many chances does Logan Paul deserve?
First, the disgraceful incident in Japan, then the disgraceful Dink Doink charade, and now CryptoZoo, a scheme that has left thousands of users in Australia, the UK, the US and beyond out of pocket.
Logan, if you are reading this – and I’m sure you will read this – do the right thing. Pay all those people that you misled.
John Mac Ghlionn is a freelance writer
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