FaZe Clan has removed Kay from their organization following accusations of manipulating a charity cryptocurrency via the campaign Save The Kids. The announcement came as a shocker as the campaign spoke widely of helping the underprivileged around the world.
The involvement of FaZe Kay is in reference to a scam that is operated as “pump and dump,” which is generally known as a Ponzi scheme.
These influencers, who were associated with FaZe, promoted the digital currency through their followers and recommended their fans to buy the crypto. Which they would dump later at a higher price, causing the crypto currency’s price to drop drastically. The substantial amount of losses in this kind of manipulated transactions are caused to small investors, which in this case were FaZe fans.
FaZe suspended the accused members and kicked Kay out
Three of the accused members, Jarvis, Nikan, and Teeqo have been suspended until pending investigations accused of running. The most recent uncovering by the preliminary findings by FaZe Clan led to Kay being kicked off the FaZe Clan, had to do with the manipulation of an altcoin called ‘Save The Kids’ ($KIDS).
The $KIDS cryptocurrency, Save The Kids, was built on the Binance Smart Chain (BSC) and introduced itself as a charity token. The promotional video, where Kay appeared, promised to ‘redistribute wealth’ to both holders and charities. The shady operation of how was first reported by Canadian YouTuber OrdinaryGamers, who put out a video appealing the federal investigators to look into FaZe clan.
What is pump and dump or ponzi scheme in Cryptocurrency?
FaZe Kay and others reportedly created a market for the digital currency Save The Kids by promoting it across FaZe channels. The fans of the successful esports organization, fell into the trap believing the capital value which FaZe brings to the table, ended up buying the cryptocurrency in a spree.
When the currency became wealthy enough, the accused dumped their holdings in bulk, getting a fair share of profits. The buyers though, in utter faith of the FaZe brand, kept buying the currency irrespective of the lack of its intrinsic values. The key of these scams are the first-movers advantage, digital currency or cryptocurrency is fairly a new area where there is little information available to investors.
Blockchain technology-powered altcoins at first might appear to be a money-minting machine, but lack of knowledge and awareness does catch a lot of people off guard ending up losing their hard-earned money to scammers. Crypto’s are still operating unregulated and under the radar, making it difficult for the authorities to catch hold of perpetrators of such scams.
For our readers, we’d suggest you to do a proper market research and only put your money into a coin which has a fair share of market capitalizations such as bitcoins, etherum and litecoins, which are apparently considered safer.