Logan Paul, brother of Jake Paul and a popular influencer, has been criticized for launching Cryptozoo, an NFT project that ended up being a big money loser for many that invested in the game.
The community behind the game became indignant over Paul’s avoidance following significant losses of money, and more attention is being paid to this issue.
What Happened To Cryptozoo?
Cryptozoo was initially introduced in 2020 during an Impaulsive episode, a comedy podcast hosted by Logan Paul and other Internet personalities. The new NFT game was said to allow players to participate in a fun game world and earn passive income.
Logan Paul, the promoter of the game, told the public that the team had spent 6 months making handmade NFTs, which also made the project’s unique selling point. Paul said at least a million dollars had been poured into building the game and making unique NFTs.
To acquire the NFT eggs, people needed to buy the in-game tokens called $ZOO. According to the project’s official website, these eggs could be hatched upon the launch, and people would get their animals, breed them, and mix them to create new breeds.
The team ranked in money as $2.5 million worth of eggs were sold on the opening date, regardless of skepticism from community members. Doubt was mostly influenced by Paul’s connection to a previously failed NFT project – Dink Donk.
But Cryptozoo’s followers believed it was different at that time.
Cryptozoo eventually kicked off some of its so-called original NFT animals in 2021 and hype instantly shifted to disappointment.
The initially released artworks were simply altered photos that one can easily find on some Internet sources. And just when people thought it couldn’t be much worse, the final disaster struck.
People who purchased the animal NFTs reported that they either impossibly hatched their eggs, claimed their yields, or withdrew their money.
Once the deposit has been made, there is no turning back. As soon as investors started to question the ongoing issues, the system was down and the price of $ZOO drastically plunged by over 60%. Logan Paul’s response at that time was only a humiliating silence.
Breaking The Silence
The controversial founder Logan Paul finally resurfaced after a period of silence, blaming the fault on the project’s lead developer. The lead developer, according to Paul, took the code to Switzerland and refused to return it without a million dollar payment.
Paul explained the drama behind the scene in an interview with The Block in April this year:
“We got ourselves involved with the wrong people who made some errors and blunders and we have a great team now that [is] still working on it.”
However, Coffeezilla, an American YouTuber dedicated to exposing scams and frauds, reached out to the mentioned developer and another one, and they said different things.
According to a recorded interview from the developer supposedly in Switzerland, Logan Paul is responsible for the problem from the beginning.
The developer stressed that Paul hired his team to code the game but failed to pay the team so he took the code for later negotiation. Another developer confirmed the failure of payment.
Cryptozoo has shown no sign of progressing since the scandal. Logan Paul, on the other hand, swiftly jumped into another NFT project. Perhaps he learned from his mistakes but is it enough to save his reputation after a series of controversial NFTs?
Legal or Not?
The Securities and Exchange Commission (SEC) of the United States has previously warned about celebrity-backed NFT ventures and other initial coin offerings (ICOs).
The firm informed investors that celebrity endorsements may be used in paid advertising and that caution was required.
According to the SEC, it is unlawful for celebrities and influencers to use social media to encourage their followers to purchase cryptocurrencies or other potentially illegal assets if they do not disclose the type, sources, and amount of any remuneration to be received should circumstances arise.
The SEC charged Kim Kardashian with $1.26 million in October for illegally promoting cryptocurrency on Instagram last year.
However, there are calls for a certain tightening level of regulations to tackle serious cases such as Cryptozoo.