In a documentary titled “5 Months with Logan Paul” released on March 27, YouTuber Logan Paul addressed allegations surrounding his controversial CryptoZoo non-fungible token (NFT), asserting that the project was not fraudulent.
The documentary provides insight into Paul’s stance on the matter, with journalist Graham Besinger recounting the downfall of the NFT venture and the subsequent criticism and accusations it faced.
Logan Paul Admits Allegations Has “Element of Truth”
Besinger claimed in the documentary that Logan Paul’s CryptoZoo NFT venture resulted in significant losses for investors, triggering a wave of accusations and threats against the YouTuber.
Paul acknowledged that while there was some truth to the allegations, he maintained that the project was not a scam. “Everything you mentioned holds some truth,” he conceded. “However, what you described isn’t fraudulent. I undertook a project that I was simply not equipped to manage at that time.”
He went on to reveal that he didn’t profit from the endeavor but instead incurred a loss of “half a million dollars.”
Moreover, Paul disclosed that the failure of CryptoZoo pushed him to contemplate suicide. “For the first time, I found myself battling suicidal thoughts,” he revealed. “I was in a downward spiral, Graham. I was overcome with tears… I felt vulnerable, which is not typical for me. I’m expected to be the one in control.”
The YouTuber initially unveiled the CryptoZoo NFT project during an episode of his YouTube podcast in August 2021.
The project drew inspiration from Pokémon, aiming to offer a fun gaming experience where collectors could acquire eggs and breed them to obtain rare NFTs.
Although initially met with enthusiasm, the project failed to gain traction. After the initial sale of 10,000 collectibles (priced at 0.1 ETH each), the development team struggled to bring the game to fruition, announcing multiple delays over time.
Following CryptoZoo’s collapse, Coffeezilla, a prominent YouTube journalist, released a three-part docuseries uncovering issues with the game. It highlighted the challenges faced by investors who suffered financial losses.
Coffeezilla’s investigation revealed that Logan Paul had engaged several questionable individuals, including a developer known as “Z,” who allegedly held the CryptoZoo source code for a ransom of $1 million.
In February 2023, a class-action lawsuit was filed against Logan Paul, alleging that CryptoZoo was a “fraudulent venture.”
Despite the legal troubles, Paul announced a $2.3 million buyback initiative in January 2024, vowing to repurchase all NFTs at their original prices. However, the tokens had plummeted by 99% from their peak value of $0.0004963 in August 2021.
Crypto Scams Continue to Soar High
While the fallout from the CryptoZoo NFT debacle has garnered attention, the prevalence of crypto scams continues to rise in tandem with the expanding interest in digital assets among traders and investors.
Annual data from BBB Scam Tracker indicates a staggering 67,000 reported scams in 2023, resulting in significant financial losses.
The 2024 crypto crime trends report from Chainalysis revealed that illicit addresses received $39.6 billion and $24.2 billion worth of cryptocurrency in 2022 and 2023, respectively.
Additionally, a report by Scam Sniffer unveiled that hackers utilized a phishing crypto scam to siphon $300 million from 320,000 traders and investors in 2023. The web3 anti-scam solution company also highlighted that scams pilfered $46.86 million worth of crypto in February 2024 alone.
