Logan Paul, a well-known influencer and the brother of Jake Paul, faced backlash for his involvement in Cryptozoo, an NFT project that resulted in financial losses for many investors. Many people within the Cryptozoo community became upset with Paul’s lack of response to their significant financial losses, and the situation has received more attention.
Cryptozoo: What Happened
Impulsive, a podcast hosted by Logan Paul and other online personalities, introduced Cryptozoo in 2020. The NFT game promised players the ability to have fun in a virtual world and earn passive income. Paul, the game promoter, claimed that the team had spent six months creating handmade NFTs and had invested at least one million dollars in developing the game and creating unique NFTs. The project presented handmade NFTs as a unique selling point.
Cryptozoo was an NFT game in which players could purchase virtual eggs called “NFT eggs,” which could be “hatched” to reveal virtual animals. Players had to buy in-game tokens called $ZOO to obtain these eggs.
Despite some skepticism from community members, the project’s official website stated that cryptozoo sold around $2.5 million worth of eggs on the launch date. Some people were skeptical of the project due to Paul’s involvement in a failed NFT called Dink Donk.
However, many Cryptozoo followers believed that the project would be successful. When Cryptozoo released some of its original NFT animals in 2021, the initial excitement quickly faded. The public discovered that the NFTs were versions of images that anyone could easily find on the internet.
As investors began to ask questions about the issues, the system went down, and the price of $ZOO dropped by more than 60% as Paul remained silent, further disappointing those affected.
Logan Paul faced criticism after the controversial NFT project that resulted in financial losses for investors. After a period of silence, Paul resurfaced and claimed that the project’s lead developer had taken the code to Switzerland and refused to return it without paying one million dollars.
However, in an interview with Coffeezilla, an American YouTuber known for exposing scams and frauds, the lead developer and another developer claimed that Paul was responsible for the issues with Cryptozoo.
The Legal Question
The Securities and Exchange Commission has warned investors about the risks of investing in celebrity-backed initial coin offerings (ICOs) and non-fungible tokens (NFTs). The SEC has stated that celebrities and influencers may receive incentives to promote these investments and that it is illegal to do so without disclosing the compensation they will receive.
The SEC has also charged some celebrities, such as Kim Kardashian, for promoting cryptocurrencies without disclosing their compensation. As a result, people have called for increased regulation in this area to address severe cases.
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