- Insane Labz has been accused of hiring celebrity impersonators to pump the price of its token
- The company hired individuals to pretend they were MMA luminaries and said they would help the token price increase
- The development marks a worrying diversion in tactics by unscrupulous projects
As anyone who has been in the crypto space for a while will know, celebrity endorsements are inevitable. Token issuers use celebrity endorsements in the same way that every other company in the world does: to promote the brand and make sales. In the crypto world, this results in a pumping of the token price, but what happens when you can’t get hold of any real celebrities? Nutritional supplements company Insane Labz appears to have found the answer – you hire impersonators and fake the endorsements.
Fake MMA Links
The story of Insane Labz and its LABZ token was reported this week by Decrypt, and it offers a troubling insight into the next phase of celebrity endorsement. In May, Insane Labz, an Arkansas-based supplement company well-known in the MMA community and a former client of Gary Vaynerchuck’s mentorship program, launched its own cryptocurrency: the LABZ token. The company promised investors celebrity endorsements as part of its roadmap, aiming to boost the token’s credibility and value.
However, instead of legitimate collaborations, the company allegedly encouraged a group of online trolls to impersonate famous personalities like UFC President Dana White, MMA fighter Nate Diaz, and social media star Hasbulla within its Telegram group. The impersonators played a significant role in this scheme, with one troll pretending to be Hasbulla, an influencer from Dagestan with millions of followers. This fake Hasbulla used Google Translate to communicate in broken Russian within the Telegram group, which led some investors to believe he was the real deal.
The Insane Labz team played along, even hinting that the impersonator might be genuine, which fueled the hype and led to a 115% surge in the token’s value in just 12 hours.
Investors Wanted to Believe
Blockchain analysis conducted by Decrypt and Bubblemaps revealed that Insane Labz paid the trolls small sums, around $155 in Solana each, to keep up the act. These payments were traced back to wallets linked to the Insane Labz team, suggesting that the company was actively involved in perpetuating the deception.
Despite the clear signs of manipulation, some investors were fooled by the fake celebrity endorsements. One investor, who lost over $475, admitted, “I thought it was gonna be huge,” believing the token would be promoted by Dana White and advertised in the UFC.
As the hype around the token began to die down, the trolls were asked to add more fake celebrities, like Nickelback’s lead singer Chad Kroeger, in a last-ditch effort to keep the momentum going. However, this only provided a temporary boost before the token’s value plummeted again. Eventually, the Telegram chat was deleted after a reporter joined and began asking questions, with Insane Labz claiming the deletion was due to death threats.
These fake endorsements helped drive the token’s market cap from $3 million to a peak of $15 million, before it eventually crashed by more than 90%, rendering the token almost worthless.
Worrying Shift in Tactics
The situation represents a worrying diversion in tactics by crypto scammers, who have so far used genuine endorsements and sold their holdings at the peak of the bubble, or strung supporters along over claimed celebrity endorsement.
This story shows that, even more than previously, the onus should be on holders to weed out the fake endorsements from the genuine ones, which isn’t always as easy as it seems, especially when blinded by the desire for their coin to increase in value.
