Logan Paul Accused of Misleading Fans in Cryptocurrency Endorsements
Logan Paul, a prominent social media influencer with over 23 million YouTube subscribers, faces new allegations of misleading his audience regarding cryptocurrency endorsements. A report by the BBC indicates that Paul promoted crypto investments without disclosing his financial interests, raising concerns about transparency and ethics in his role as a financial influencer.
A “Pump and Dump” Scheme?
The allegations suggest Paul may have participated in a “pump and dump” scheme, where he purportedly encouraged the promotion of specific cryptocurrencies to inflate their value artificially. This would allow him to sell his holdings at inflated prices, profiting at the expense of unaware investors. According to the BBC, Paul’s endorsements reportedly drove price surges, enabling financial gains for him while other investors faced losses as prices fell.
This controversy is not Paul's first encounter with crypto-related disputes; he currently faces a multi-million-dollar lawsuit linked to his failed project CryptoZoo, which promised rewards to users investing in digital assets but was criticized for poor execution, resulting in significant investor losses. Despite ongoing accusations, Paul denies any wrongdoing.
A Growing Trend of Celebrity Crypto Controversies
Paul is part of a broader trend of celebrities facing scrutiny over crypto investments. Earlier this year, Olympic gold medalist Caitlyn Jenner was named in a class-action lawsuit by investors who claimed she misled them into purchasing the failing crypto token JENNER. The lawsuit alleges Jenner and her manager, Sophia Hutchins, fraudulently promoted JENNER as an unregistered security.
Additionally, singer Jason Derulo has been implicated in a “pump and dump” scheme involving his token, $JASON, which surged 6,000% on June 23, 2024, before crashing the following day. Despite the volatility, $JASON reached a market cap of $5 million before its decline.
In 2023, eight celebrities, including Jake Paul and Lindsay Lohan, were charged by US regulators for allegedly participating in a crypto scam, accused of using their platforms to artificially inflate two crypto tokens without disclosing payment for promotions.
High-profile figures such as Kim Kardashian and Floyd Mayweather have also faced crypto controversies. In 2022, investors filed a class action suit against them after losing money in a project, although it was dismissed later. Kardashian subsequently encountered legal issues with the US Securities and Exchange Commission (SEC), settling the case for up to $1.26 million in penalties and fees.