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Outrageous scam exposed: Project owner hires internet trolls to impersonate celebrities to sell cryptocurrencies

Outrageous scam exposed: Project owner hires internet trolls to impersonate celebrities to sell cryptocurrencies

BlockBeatsBlockBeats2024/08/19 06:55
By:BlockBeats

"We were just trying to do it as a joke, but it got a little out of hand," one of the impersonators said.

Original title: How a Sports Brand Used Fake Celebs to Pump an 'Insane' Cryptocurrency
Original author: Ryan S. Gladwin, Decrypt
Original translation: Felix, PANews


A nutritional supplement company allegedly hired a group of online water armies to impersonate celebrities, deceive investors, and peddle its tokens. The plan worked for a while, but was later exposed.


Insane Labz is an Arkansas-based supplement company with a well-known reputation in the MMA (mixed martial arts) and Barstool Sports circles and a former client of Gary Vaynerchuk's entrepreneurial mentoring program. Insane Labz launched the LABZ token in May, and in its roadmap, the project promises to work with "vetted celebrities." But the project encouraged trolls to impersonate celebrities like UFC president Dana White, MMA legend Nate Diaz and social media personality Hasbulla, and hype the LABZ token in the project’s Telegram group.


The scam helped the LABZ token’s market value soar from $3 million to $15 million at its peak. The token is now nearly worthless, down more than 90%. But not before the apparent scams tricked some less savvy investors into buying in.


Blockchain data reviewed by Decrypt and blockchain analytics firm Bubblemaps shows that a crypto wallet associated with the Insane Labz team paid the trolls a small fee of $155 per person in Solana.


“We were just doing this as a joke, but it got a little out of hand,” said one of the impersonators.


"Hasbulla" joins chat, some investors question whether it is the real Hasbulla


"Hasbulla" joins chat


On May 16, the first fake celebrity "TheOfficialHasbulla" joined the Insane Labz Telegram chatroom. The account appears to belong to Hasbulla Magomedovich Magomedov, an influencer with dwarfism and 8 million followers on Instagram. The real Magomedov does not speak English, so the fake influencer can only communicate through Google Translate and GIFs.


Nevertheless, some users in the chat questioned whether he was real. The administrator of the Insane Labz Telegram group was vague about this. "Maybe he is real," Insane Labz replied in the Telegram group.


Users reacted immediately.


Insane Labz tokens rose 115% in 12 hours. At that time, wallets associated with the company had not yet paid the fake Hasbulla. During this period, two wallets associated with Insane Labz sold about $12,450 worth of LABZ tokens, while also purchasing more tokens.


Outrageous scam exposed: Project owner hires internet trolls to impersonate celebrities to sell cryptocurrencies image 0

LABZ-associated wallets selling under the name “Hasbulla” hyped the project


The largest single sale of LABZ occurred three days later on May 19, when the token’s price, though past its peak, was still high. An unidentified whale dumped more than $70,000 worth of tokens, making a profit of about $68,000 after buying LABZ on the day of the token launch.


The Hasbulla impersonator said his friends joined the group over the next two weeks: a fake Ultimate Fighting Championship (UFC) president, Dana White, and a fake UFC fighter, Nate Diaz.


The Nate Diaz impersonator explained that the fake Hasbulla frequently joined groups pretending to be a famous Dagestani. “Then when we saw the crazy reaction from Insane Labz to Hasbulla joining the chat, we wanted to switch things up and jump in on the joke,” he said.


Outrageous scam exposed: Project owner hires internet trolls to impersonate celebrities to sell cryptocurrencies image 1

Fans loved it when the fake Nate Diaz spoke in the chat


“Hasbulla had no idea about the company or its tokens,” said Justin Ozuna, Hasbulla’s business manager who helped Hasbulla sign a five-year promotional contract with the UFC. “I highly doubt the same was true for Dana White and Nate Diaz.”


Another LABZ token investor said the project not only encouraged impersonators, but also “heavily promoted this joke.” Insane Labz “created LABZ token memes with celebrities’ faces and hyped them up whenever a celebrity posted a chat.” Insane Labz CEO Dustin Lebleu even pretended to have a FaceTime chat with the real Dana White about the project.


“The token founder posted a FaceTime chat he had with ‘Dana White’ asking ‘Dana’ if she had a screenshot of the chat.” Members of the Telegram chatroom, including some impersonators and individual investors, said they believed Dustin Lebleu was managing the account.


“He later posted what I believe was a doctored photo of a FaceTime chat,” the investor said, providing a screenshot of the photo from the Insane Labz Telegram group.


Outrageous scam exposed: Project owner hires internet trolls to impersonate celebrities to sell cryptocurrencies image 2

According to the Insane Labz account, Dana White FaceTimed with the LABZ team


On May 28, the fake Dana White told the official Insane Labz Telegram group that he planned to give away four tickets to an upcoming UFC event. The Insane Labz team jumped on the bandwagon and promoted the giveaway on Twitter. The LABZ token surged 17% as a result, and it was at this point that the Labz team contacted the fake White and offered to pay to continue the scam.


The official Insane Labz account contacted the fake Dana White, offering to pay the “villain” and his friends to continue messaging in the Telegram chat, the impersonators claim. Eventually, they reached an agreement to pay 1 Solana (about $155) per week.


Data company Bubblemaps found a connection between one of the payment wallets that sent 1 SOL ($150) to the impostor and the wallet that originally minted the LABZ token. Wallet DvFne 1 sent 150 SOL ($24,000) to wallet CLrC 8 m, which later paid a total of 3 SOL ($459) to the impostor. The original DvFne 1 wallet also funded the address FtfPXX that minted LABZ tokens.


Bubblemaps lead investigator Thomas Perrin said: "We can assume that the central wallet (DvFne 1) is a team wallet, as it was the first wallet to fund FtfPXX, which is the minting wallet." "Therefore, the payment wallet is closely related to the team wallet."


Thomas Perrin also claimed that the payment method (i.e. sending funds through multiple different wallets) is suspicious. "Why not use a wallet with a marketing label?"


Outrageous scam exposed: Project owner hires internet trolls to impersonate celebrities to sell cryptocurrencies image 3

Bubblemaps shows how the payment wallet is associated with the minting address


In addition, Telegram screenshots provided by the impersonators were reviewed, which they said showed that the Labz team was coordinating payments and providing payment transaction links when payments were made.


“The whole thing is a fraud”


Over the next month, a total of 15 SOL were sent to the impersonator’s wallets, which they claimed were sent by Insane Labz. Meanwhile, LABZ token investors were misled into believing that the celebrity endorsements were real.


Insane Labz investor: “I realized the whole thing was a fraud.”


Conversations between the impersonators and Insane Labz made it clear that the project actively encouraged this deception. According to screenshots provided by the impersonator, in another Telegram group called “Labz UFC Hype Group,” the operator of the Insane Labz account joked with the fake celebrities.


“I thought the real Nate would be crazy now haha,” the fake Nate Diaz wrote in a private chat. The Labz account responded: “Hahahaha, you’re the real Nate…”


The most obvious impersonation was Hasbulla, who didn’t speak English, but the impersonator spoke fluently in the chat. Screenshots show that at one point, the Hasbulla impersonator said he would try to find Hasbulla’s text-to-speech AI to create a voice note.


The Labz account responded: “That’s gross.”


Outrageous scam exposed: Project owner hires internet trolls to impersonate celebrities to sell cryptocurrencies image 4

Fake Hasbulla considered using AI


The fake celebrities said their Telegram inboxes were inundated with hundreds of messages and calls from fans who wanted to prove they were real.


“I discovered the whole thing was a fraud and the founders knew full well that these people weren’t the real Dana White et al and were using their celebrity status to drive up the token price,” said one LABZ token investor. “I sold my tokens at that point and left the group.”


Outrageous scam exposed: Project owner hires internet trolls to impersonate celebrities to sell cryptocurrencies image 5

LABZ token investors would regularly message the trolls, asking if they were real


The truth was revealed


Eventually, the hype died down and the token price fell. In response, the impersonators claimed the Labz team asked them if they could add Nickelback lead singer Chad Kroeger. They agreed.


After a fake Kroeger account was added on June 27, the token rose 17%. But it was short-lived. The token fell 74% over the next two weeks. Communication between the fake celebrities and Insane Labz began to break down.


After someone joined the Labz group chat and messaged "Dana White," the Insane Labz team instructed the fake celebrity to stop speaking. That evening, the Telegram chat was deleted. Insane Labz claimed on its official X account that the group had been deleted because they had received death threats.


Now that it's over, the pranksters say they are not embarrassed about impersonating celebrities.


"I've been using this nickname for years and have appeared in hundreds of Telegram groups - no one has ever played me like this before," said the fake Hasbulla. “Anyone with a brain can tell it’s a Telegram nickname.”


Before its foray into crypto, Arkansas-based Insane Labz was founded in 2014 and was known for its sports powders. Its products are sold at online retailers such as Amazon and Walmart, and the company has annual revenue of about $15.2 million, according to Zoominfo data.


Founder and CEO Dustin Lebleu is a client of VaynorMentors, a startup consulting service run by prominent entrepreneur Gary Vaynerchuk, better known as Gary Vee.


Gary Vaynerchuk praised Dustin Lebleu in a 2019 blog post that has since been deleted.


A representative for Gary Vaynerchuk said: "Gary was away with his family this week, but we can confirm that there has been no official association or endorsement between Gary/VaynerX and Insane Labz since a brief consulting partnership in 2018."


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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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