Celebrity-Endorsed Cryptocurrency Scams and Rug Pulls: A Call for Awareness

Crypto Impact Hub

Jul 2, 2024 — 5 min read

The cryptocurrency market, while promising innovation and financial opportunities, has also become a breeding ground for scams and fraudulent activities. A disturbing trend is the involvement of celebrities in promoting or creating scam projects, leading to significant financial losses for investors. This article highlights some notable cases from 2021, emphasizing the need for awareness and education to protect the crypto community and potential investors.

We fast forward to 2024 with these exit scams still getting featured by attackers getting into the accounts of celebrities or just by providing them a cut and claiming "hack"

1. Lil Uzi Solana NFT Rug Pull (September 2021)

Rapper Lil Uzi Vert promoted the NFT project Eternal Beings to his 8.5 million followers, promising high returns. He claimed the floor price would reach "6 SOL easy" before launch. However, the project turned out to be a rug pull, with the price plummeting to 2.5 SOL. After the fallout, Lil Uzi deleted his promotional tweets. Notably, Snoop Dogg also shared a tweet about the project before deleting it (BeInCrypto).

2. Faze Kay Save The Kids Coin Rug Pull (June 2021)

This case is one of the most infamous rug pulls of the year. Faze Kay, a member of the Faze Clan, promoted a charity cryptocurrency called Save The Kids. Shortly after the launch, he altered the source code to allow himself to sell off his holdings, leading to a collapse in the coin's value. This incident was extensively covered by investigative YouTuber Coffeezilla, who exposed the details of the scam (BeInCrypto).

3. Faze Bank and Faze Kay BankSocial Rug Pull (May 2021)

Faze Bank and Faze Kay promoted BankSocial to their followers, leading to a significant increase in trading volume from $2.5 million to $12.2 million in a single day. However, the volume quickly dropped to as low as $300,000 the following week. The promotional tweets were deleted, and promised giveaways never occurred. Despite the scam, Faze Bank remains a part of the Faze Clan (BeInCrypto).

4. Logan Paul Crypto Zoo NFT Scam (September 2021)

Logan Paul launched an NFT project called Crypto Zoo, claiming it was built from scratch and featured unique NFTs. However, Coffeezilla revealed that the NFTs were merely photoshopped images. The project switched contracts before launch, causing early investors to lose money. The trading volume peaked at $24.54 million before crashing to $3.5 million (BeInCrypto).

5. Logan Paul Dink Doink Scam (June 2021)

Logan Paul promoted the Dink Doink token, calling it "the dumbest and most ridiculous shit coin" and heavily endorsing it. Despite his promotion, the token's trading volume fell from $1.2 million to just $532. Coffeezilla called out Paul for promoting a coin where 80% of the supply was held by the developers (BeInCrypto).

6. Jake Paul Yummy Token Scam (May 2021)

Jake Paul, known for promoting various cryptocurrencies, endorsed the Yummy token on May 14th. The token hit an all-time high of $430,187 before plummeting to zero trading volume the following week. This pattern mirrored his previous promotions of other questionable tokens (BeInCrypto).

7. Snoop Dogg BabyEth Rug Pull (August 2021)

Snoop Dogg promoted BabyEth on Instagram without marking it as an advertisement. The coin's trading volume peaked at $2 million before dropping to zero within a month. The project's Telegram group later linked to a new contract address with the supply controlled by a single wallet (BeInCrypto).

Conclusion

These cases highlight the critical need for vigilance and education in the cryptocurrency community. Influencers and celebrities often have the power to sway public opinion and drive investments, making it essential for investors to conduct thorough research before committing their funds. The crypto community must work together to expose fraudulent activities and educate newcomers to prevent cryptocurrency from being tarnished by scams and unethical promotions.

For more detailed investigations and coverage of these scams, refer to sources like Coffeezilla and Cointelegraph.

Recent reports highlight a dramatic rise in social media hacking incidents, particularly involving celebrities and influencers. These high-profile cases often result in compromised accounts used to promote cryptocurrency scams or other malicious activities. According to a report by Techopedia, the global rate of social media account hacking has surged, with over 1.4 billion accounts compromised monthly. This increase has led to significant financial losses, reputational damage, and psychological effects on victims. Experts stress the importance of strong passwords, multi-factor authentication, and user education to combat these threats (Techopedia).

Specific Celebrity Incidents

Several celebrities have recently fallen victim to these hacking incidents:

50 Cent: The rapper's social media accounts were reportedly compromised, and hackers used his platform to promote a fraudulent cryptocurrency scheme. Fans were urged to invest in a new memecoin, promising high returns, which led to significant financial losses for many unsuspecting followers.
Caitlyn Jenner: Caitlyn Jenner's social media accounts were hijacked to endorse a new memecoin, purportedly backed by her. The fraudulent posts promised massive returns, leading to a surge in investments before the scam was revealed.
Iggy Azalea: The rapper Iggy Azalea's Twitter account was taken over by hackers who promoted a new cryptocurrency token. The posts garnered considerable attention and investment before Azalea managed to regain control and warn her followers about the scam.

These incidents underscore the need for better security measures and heightened awareness among social media users.

Memecoin Frenzy

The craze around memecoins continues to grip the cryptocurrency market. Memecoins like Dogecoin and Shiba Inu have seen fluctuating interest, driven by community hype and celebrity endorsements. New memecoins are constantly emerging, often experiencing rapid price increases followed by sharp declines. These tokens are typically subject to high volatility and speculative trading, making them risky investments. The frenzy around memecoins is often fueled by social media, where influencers and community leaders can significantly impact market sentiment and prices (CoinDesk) (Cointelegraph).

Notable Memecoin Incidents

Hulk Hogan's Memecoin: Recently, a memecoin associated with Hulk Hogan experienced a significant pump and dump. Hogan claimed his accounts were hacked, and he had no involvement in the promotion of the token. This incident highlights the risks associated with memecoin investments and the potential for manipulation (BeInCrypto).
Jason Derulo's Memecoin: Another notable incident involved singer Jason Derulo, whose social media platforms were used to promote a memecoin. The sudden surge in the token's value was followed by a swift decline, leading to allegations of a rug pull. Derulo later claimed his accounts had been compromised (BeInCrypto).

Conclusion

The intersection of social media hacking and the memecoin frenzy presents a volatile environment for investors. High-profile endorsements, whether legitimate or the result of hacking, can significantly influence market dynamics. By staying informed and cautious, investors can better navigate these challenges and avoid falling victim to scams and hacking attempts.

For more detailed information, you can visit BeInCrypto and Cointelegraph.