Logan Paul accused of misleading fans over crypto investments

Logan Paul, the massively fashionable societal media personality, is facing caller questions implicit his cryptocurrency dealings amid ongoing concerns helium whitethorn person profited from misleading fans.

The BBC has seen caller grounds suggesting helium promoted investments without revealing helium had a fiscal involvement successful them.

The power of Paul - whose YouTube transmission has much than 23 cardinal followers - appears to person caused prices successful these investments to spike, starring to suggestions helium could person profited from income of immoderate tokens helium held.

Paul besides presently faces a multi-million-dollar suit implicit a failed crypto task called CryptoZoo.

He denies immoderate wrongdoing.

The BBC has discovered that soon earlier Paul tweeted astir a peculiar crypto coin successful 2021, an anonymous crypto wallet with adjacent connections to his nationalist wallet had traded successful the coin.

That anonymous wallet went connected to marque a $120,000 (£92,000) profit.

Crypto wallets (which tin beryllium carnal devices oregon an online service) clasp users' keys to their accounts, and fto radical send, person and walk crypto.

Our uncovering comes aft Time Magazine reported akin enactment involving a antithetic cryptocurrency and different anonymous wallet.

For respective months, Paul refused to speech to the BBC astir our investigation. Then helium appeared to relent, inviting america to interrogation him astatine his gym successful Puerto Rico.

However, erstwhile our unit arrived, a Logan Paul lookalike turned up successful the YouTuber’s place, soon followed by a assemblage shouting maltreatment astir the BBC.

Minutes aft abandoning the interview, we received a lawyer’s missive connected behalf of Paul, informing america of the imaginable consequences if we published our findings.

Logan Paul built a worldwide pursuing arsenic an net personage by uploading abbreviated video clips, archetypal to the now-closed level Vine, and past connected YouTube.

About 3 years ago, Paul’s videos began mentioning cryptocurrency (crypto, arsenic it is commonly known) much and more.

Crypto is simply a signifier of integer wealth that uses unafraid exertion to work, without the request for a cardinal bank.

In 2021, Paul promoted a bid of highly high-risk crypto tokens called “meme coins”.

These are usually inspired by net jokes oregon memes and are supported by online communities. Meme coins person nary different existent intent different than to beryllium traded and, since they person nary intrinsic worth, their worth tin - and often does - driblet to zero.

Paul extolled the virtues of an Elon Musk-themed meme coin known arsenic Elongate. “Elongate made maine rich. Elon babe let’s go!” Paul announced successful a video clip to Maverick Club, his subscription-only instrumentality club.

Following this namecheck, the terms of Elongate roseate by implicit 6,000% to an all-time high. It past remained astatine that terms for a fewer hours earlier it crashed.

We cannot beryllium definite of Logan Paul’s intentions erstwhile helium released his clip. However, it seems apt that his notation of Elongate affected its price.

Tech writer Will Gotsegen says crypto is simply a marketplace driven to immoderate grade by societal media and influencers: “A large feline with a batch of influence... idiosyncratic similar Logan Paul, buys a tonne of crypto and tells their followers astir it. They're going to bargain it too.”

The anonymous crypto wallet analysed by the BBC appears to person adjacent connections to Paul.

Anyone tin spot the transactions made by a wallet, but the proprietor tin take to stay anonymous. If an proprietor attaches their sanction oregon idiosyncratic details it becomes a nationalist wallet.

We could spot that the wallet archetypal received funds successful February 2021 from a nationalist wallet owned by Logan Paul. It past started buying and trading crypto.

Logan Paul: Bad Influence?

Logan Paul, 1 of the biggest societal media influencers successful the world, is facing disapproval for his relation successful promoting cryptocurrency projects. Matt Shea investigates the allegations.

Speaking to instrumentality enforcement and alleged victims, and trying to get adjacent to the antheral himself, Shea seeks to yet reply the question: did Logan Paul bash thing wrong?

Watch connected BBC Three astatine 21:00, 20 November oregon connected BBC iPlayer soon aft broadcast

The wallet was aboriginal paid funds from Maverick Club and held Elongate erstwhile Paul promoted it connected 10 May 2021.

Shortly after, it besides traded successful different Musk-related meme coin - aft Paul had tweeted that it was headed “to the moon”. In the crypto community, this means idiosyncratic believes the terms of the coin is astir to sprout up.

About an hr earlier Paul’s tweet, the chartless wallet purchased astir $160,000 (£123,000) worthy of the token. The tweet prompted an influx of buyers, spiking the price.

Twelve hours later, the wallet sold astir of its holding. The full nett made from this commercialized appears to beryllium conscionable implicit $120,000 (£92,000).

Logan Paul chose not to respond to the BBC’s allegations regarding the crypto wallet, the trading that occurred wrong it, oregon his transportation to it, contempt responding to immoderate of our different requests via his ineligible team.

In June 2021, Paul besides promoted a meme coin called “Dink Doink”.

Anyone who bought it would ain shares successful a cartoon quality that resembled a metallic coil. They would gain a information of its net if it appeared successful a TV amusement oregon film.

Paul promoted the token connected Twitter (as the tract was past known), and told a Telegram radical dedicated to Dink Doink that helium “believed” successful it, saying: “I deliberation it’s going to spell crazy.”

Again, this led to a immense influx of buyers, causing Dink Doink's worth to spike. Then - pursuing a acquainted signifier - large-scale holders of the token began selling, causing its terms to autumn by 96% successful conscionable 2 weeks.

Time Magazine analysed different anonymous wallet that had bought Dink Doink anterior to Logan Paul’s promotion of the coin and past sold its holding soon after. This wallet aboriginal sent $100,000 (£78,000) to Paul’s nationalist wallet.

When the BBC asked the influencer astir this wallet, his lawyers did not contradict that it belonged to him, oregon was held for his benefit, but were adamant that the $100,000 that was transferred was not related to Dink Doink.

They bash judge that Paul traded Dink Doink, but accidental helium lone made $17,000 (£13,400).

For respective months, Paul refused to beryllium interviewed by the BBC.

Then, unexpectedly, helium agreed to speech to america astatine the boxing gym successful Puerto Rico that helium co-owns with his brother.

We sent Paul a database of the allegations we wanted him to respond to, and his PR squad requested we question to the Caribbean island, truthful helium could reply successful person.

They besides insisted we flew into the land portion it was being pummeled by Tropical Storm Ernesto, which had knocked retired powerfulness to hundreds of thousands of people.

At the gym, we noticed a unusual ambiance - with a suspicious fig of his ain cameras pointed astatine us. Paul’s adjunct insisted our cameras should beryllium signaling from the infinitesimal the prima entered the room, due to the fact that of his strict docket and timekeeping.

Then things became adjacent stranger. Instead of Logan Paul, a lookalike arrived and sat down successful beforehand of our reporter, Matt Shea, and began impersonating the YouTuber.

We called him retired and began complaining to Paul’s assistant, asking whether the existent Logan Paul would beryllium coming. At that moment, a radical of radical abruptly appeared, seemingly from nowhere, wielding banners and shouting that the BBC were “paedophiles”.

We had flown each that mode conscionable to beryllium trolled.

In the past fewer years, a fig of celebrities person tally into ineligible occupation for promoting crypto to followers without disclosing that they had vested interests.

Kim Kardashian was fined $1.26m (£1m) successful 2022 for promoting a token called EthereumMax connected her Instagram account.

According to Gary Gensler, the caput of the Securities and Exchange Commission (SEC), the assemblage policing the US concern industry, if a personage is promoting a peculiar crypto token, they are “supposed to archer you if they get paid, however overmuch they get paid, whether they ain the tokens, whether they made wealth connected the tokens, whether they really cognize thing astir the project”.

Logan Paul is present facing a suit concerning his adjacent task successful crypto - CryptoZoo.

This was marketed arsenic an online trading paper game, but alternatively of cards, CryptoZoo was to usage NFTs (non-fungible tokens) - collectible pieces of integer creation that tin person a worth of their own.

To play CryptoZoo, it was indispensable to bargain a cryptocurrency called Zoo Token, that could past beryllium utilized to bargain NFT “eggs”.

These eggs were expected to yet hatch into NFT “animals” that would breed and springiness commencement to NFT “hybrid animals” with names similar penguin-shark and panda-fin.

Paul’s squad claimed these hybrid animals would someway marque participants wealth by passively generating much Zoo Tokens.

“It’s a truly amusive crippled that makes you money,” helium told his assemblage soon up of the motorboat successful September 2021.

CryptoZoo attracted astir $18.5m (£14.3m) successful investment.

Rueben Tauk - a 21-year-old from north-east England - was among the Logan Paul fans who bought into CryptoZoo.

“I was truly excited to beryllium portion of thing that helium was doing.”

However, the crippled was beset by problems from the infinitesimal it was released.

“We were fixed definite expectations astir features that would beryllium released,” Rueben told us. “A batch of the clip those features wouldn’t work.

“After a definite point, you commencement to realise that something’s wrong.”

The worth of the Zoo Tokens and the eggs started to plummet. Rueben says helium personally mislaid £33,000.

At slightest 130 investors are present progressive successful a suit against Paul (Rueben is not 1 of them). They assertion they mislaid astir $4.2m (£3.25m).

The lawyer down the claim, Tom Kherkher - himself a fashionable YouTuber connected ineligible affairs - says the nonaccomplishment to present the crippled forms lone portion of the case.

He says leaked messages uncover Paul and his squad were progressive successful a “stealth launch” of the Zoo Tokens, allowing them to softly bargain successful astatine a debased price.

“The squad appeared to hold that they tin statesman selling erstwhile the full worth of each the Zoo Token successful circulation hits $200m [£157m],” helium says.

“If you had that papers with that nonstop verbiage issued by a CEO of a publically traded company, they would beryllium charged with fraud successful 2 seconds. That is insider trading.”

Paul has repeatedly denied immoderate wrongdoing relating to CryptoZoo. Instead, helium has laid the blasted connected different members of the squad whom helium besides says failed to present the promised features.

Earlier this year, Paul announced a partial compensation strategy for disappointed investors. He promised to refund radical who had bought the NFT eggs, but lone if they agreed not writer him for thing relating to CryptoZoo.

Paul is besides bringing a libel assertion against 1 of his online detractors successful the USA, for claims made astir his motives.

Logan Paul’s immense popularity depends connected his fans, and shows small motion of declining.

In caller years, Paul has turned his manus to boxing and wrestling, arsenic good arsenic launching the drinks institution Prime, with British influencer KSI.

The merchandise became notorious for its viral launch - with lone a constricted stocks made available, Prime spawned a re-sale marketplace with bottles being advertised for hundreds of pounds. It was a testament to some Logan Paul and KSI’s power implicit their chiefly young audience.

However, for astatine slightest 1 fan, his representation has been tarnished for good.

“Once you perceive to idiosyncratic and spot what they’re saying and they betray that trust,” says Rueben Tauk, “their words don’t mean thing to you immoderate more.”