Outside Source
YouTube star MrBeast isn’t the only famous name with ties to an alleged crypto pump-and-dump scheme.
Crypto.news found at least nine other scenarios where either a celebrity or influencer promoted a coin to investors, only to sell their holdings at an inflated price. The digital asset’s price subsequently crashed, leaving other investors — often their fans — with significant losses.
Most celebrity projects typically fizzle out soon after launch, anyway. But there are notable cases that keep cropping up that alarm regulators, and remind investors to conduct research before following high-profile promotions. Here’s our list, teeing off with Donaldson.
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MrBeast
On Tuesday, MrBeast — whose real name is Jimmy Donaldson — allegedly profited millions of dollars from questionable crypto deals.
Experts from advisory firm Loock.io and blockchain analysts like SomaXBT, who previously accused Donaldson of making $10 million from low-cap tokens, claim MrBeast leveraged his influence to profit from insider trading.
According to a group of on-chain investigators, Donaldson — who boasts 320 million YouTube subscribers — uses his influence to promote tokens, “only to later dump them on the market.”
Crypto isn’t the only thing Donaldson promotes. The stunt video specialist has also been known to hype food products, including “Beast Burgers” and “Lunchly.” Observers scrutinized the low quality standards of both.
Logan Paul
Logan Paul, who partnered with MrBeast on Lunchly, is also a popular YouTuber known for controversial stunts and promoting products, including his own energy drink brand, Prime.
One of his most notable whiffs involves CryptoZoo, a non-fungible token (NFT) game that allows players to buy digital eggs that would hatch into animals. These NFTs could be traded or sold, with the potential for players to earn a profit.
However, after initial sales and marketing, the project stalled, leaving many investors with NFTs that were effectively worthless.
Critics, including the YouTuber Coffeezilla, accused Paul and his team of mismanaging the project and deceiving investors.
Paul later responded to the allegations, blaming external developers for the issues and promising to address the concerns, though the project’s status remains contentious.
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.
Investors alleged that the E! reality star misled the public by promoting EMAX, a now nearly worthless cryptocurrency. The court found that the claims didn’t meet the “heightened pleading standards” necessary for securities fraud, meaning that the evidence presented was insufficient to proceed with the case.
This dismissal followed Kardashian’s earlier settlement with the SEC, where she agreed to pay a $1.26 million fine for failing to disclose that she had been paid $250,000 to promote EMAX.
As part of the settlement, she also agreed to avoid endorsing any crypto products for three years.
The plaintiffs retained the right to appeal, but the case underscored the legal and ethical complexities around influencer marketing in volatile markets like cryptocurrency
Floyd Mayweather
In 2022, regulators charged the undefeated boxing champion Floyd Mayweather with failing to disclose payments for promoting three initial coin offerings (ICOs), including a $100,000 payment from Centra Tech.
They alleged that he used his social media platform to encourage his fans to participate in Centra’s ICO, stating that it was starting soon and that they should buy tokens before they sold out.
However, Centra Tech was later found to be fraudulent. Its founders, Sohrab Sharma, Raymond Trapani, and Robert Farkas, were charged by regulators with defrauding investors by making false claims about partnerships with major companies like Visa and MasterCard. Authorities also alleged that the company misled investors about the technology and viability of its debit card product.
Mayweather’s involvement drew significant criticism from ZachXBT, a popular blockchain investigator. ZachXBT cited numerous other situations in which the fighter’s followers lost substantial amounts after investing in a scam, including the Kardashian-backed EthereumMax.
DJ Khaled
DJ Khaled, whose real name is Khaled Mohamed Khaled, also promoted Centra Tech on social media.
Like Mayweather, Khaled was charged for failing to disclose that they were paid to promote the ICO, which violated anti-touting provisions.
As a result, in 2018, Khaled settled with the U.S. Securities and Exchange Commission (SEC) by paying a fine of $152,725 (Mayweather paid over $600,000). This included disgorgement of earnings and additional penalties.
Khaled also agreed not to promote any securities for two years. This case marked one of the SEC’s early actions against celebrity endorsements in the crypto industry, setting a precedent for transparency and accountability in such promotions.
Soulja Boy
The rapper and social media influencer was charged by the SEC for allegedly promoting TRON (TRX) and BitTorrent (BTT) without disclosing that he was being paid.
Soulja Boy, along with other influencers, faced a legal backlash, as he continued to promote various coins and NFTs despite the risks.
Jake Paul
YouTuber and boxer Jake Paul — brother to Logan Paul — faced a lawsuit for allegedly promoting the cryptocurrency SafeMoon without disclosing his financial interest in it.
SafeMoon’s value dropped sharply after promotions by Paul and other celebrities.
It doesn’t end there. Another incident was Paul’s association with Save the Kids, a cryptocurrency project that claimed to support charitable causes.
The project faced significant backlash and scrutiny when it was alleged that Paul and others promoted the token to inflate its price and then sold off their holdings, which led to a sharp decline in its value, resulting in substantial losses for investors.
Paul denied any wrongdoing.
Lindsay Lohan
In 2023, Lindsay Lohan was among several celebrities, including Jake Paul, to face charges from the SEC for allegedly promoting TRX and BTT tokens from the Tron Foundation without appropriate disclosures.
The case highlighted that she and others were paid to endorse these tokens.
But, Lohan often promoted crypto projects and NFT collections on social media. A spreadsheet leaked by ZachXBT on social media suggested that the “Mean Girls” star regularly charged $25,000 to shill projects — or $20,000 for a retweet.
That led to some unwelcome attention from the SEC, which accused her of boosting 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
The former NBA star promoted EthereumMax on his social media in 2021 without disclosing his payment, like Kardashian and Mayweather. Pierce ultimately settled with the SEC in 2023, paying a $1.4 million fine.
The lawsuit filed against these celebrities accused them of engaging in a pump-and-dump scheme, where they allegedly promoted EMAX to inflate its price and then sold their holdings, leading to significant losses for retail investors who were drawn in by their endorsements. While Pierce and his fellow promoters have denied any wrongdoing, the legal implications of their endorsements highlighted concerns regarding celebrity influence in the crypto market
The EMAX crackdown was part of a broader effort to investigate celebrity endorsements in the cryptocurrency space. This situation has drawn attention to the legal responsibilities of influencers when promoting financial products
Andrew Tate
YouTuber Coffeezilla, known for exposing scams, is in a public dispute with proud misogynist Andrew Tate over the influencer’s shifting stance on crypto.
Coffeezilla shared past clips of Tate, who once dismissed crypto as worthless and claimed he wouldn’t exploit fans by launching coins. Despite this, Tate has since promoted multiple meme coins, including “ROOST” and “F Madonna token,” both of which lost significant value shortly after his endorsements.
Coffeezilla also highlighted Tate’s promotion of “Real World Token,” tied to Tate’s online course, which resembles a pyramid scheme, with subscribers earning tokens that represent profit shares.
Tate, who was arrested in Romania in 2022 on human trafficking charges, has maintained his innocence as his legal troubles continue to attract public attention.
This article first appeared at crypto.news
