Not even a month after the historic achievement of FaZe Clan, the gaming organization became the talk of the town again. Only this time, its name was tangled with a crypto scam controversy.
In 2021, Coffeezilla blew a whistle against FaZe Kay, revealing the red flags indicating its pump-and-dump scam operations. This includes encouraging all his 800 thousand X (formerly, Twitter) followers to buy Save the Kids (BNB/KIDS) to artificially inflate the crypto price.
It’s reported that Kay pocketed around USD30,000 by selling off about 6 billion KIDS tokens after its launch.
In this TRU Insight, we’ll unravel everything you need to know about the Save the Kids pump-and-dump crypto scam and how FaZe Clan members managed to pull off such a scam.
Overview of Pump and Dump Crypto Scam
We all know that all cryptocurrencies, even the biggest ones, have no intrinsic value. They’re highly speculative. Thus, the sentiment of an influential person could cause havoc in the crypto market.
The impact of the network effect becomes the entry point of pump and dump crypto scammers.
As its name suggests, this crypto scam involves hyping an unknown altcoin to inflate the price and dumping their holdings at a profit once the price is deemed enough.
A pump and dump scam follows undergoes three phases:
- Initial Pump: The operator buys a significant amount of an unknown altcoin to establish a sense of growth.
- Pump: The operator and their promoters hype the coin on social media to attract the public to buy it. This phase would typically skyrocket the coin price.
- Dump: Once the operator deems the price enough, they will start selling off all their holdings at a profit. This would ultimately drag the price down due to dried-up volatility.
What Is Save the Kids Token?
Save the Kids token is a cryptocurrency forged as a charity coin. According to the now-shutdown website, 3% of all KIDS transactions will be distributed to charities and existing holders.
All these promises, with a touch on humanity, attracted investors to buy the coin.
However, all these promises went down the drain as the developer of KIDS hard coded KIDS a few minutes before its launch to allow FaZe Clan members to dump their holdings.
Is Save the Kids Affiliated with the Save the Children Charity?
No, the Save the Kids cryptocurrency (now an abandoned crypto project) was not affiliated with the reputable Save the Children charity.
Save the Children is a global non-government organization with a rich history and legacy that can be traced back to 1919. This NGO has been hailed as the Top Charity for Child Protection and Sponsorship (Charity Watch) and one of the Best Charities for Refugee and Immigration (Charity Navigator).
The Save the Kids crypto project developer and the involved FaZe Clan members are not affiliated with the Save the Children organization.
The Promised of Anti-Whale Mechanism
One feature of the KIDS network is its anti-whale mechanism—designed to ensure that big-spending investors can’t hold a significant amount of the cryptocurrency. This ensures that no one can manipulate the crypto price.
Essentially, the developer set a mechanism ensuring that those holders with significant holdings can only sell 0.1% of the total supply daily. With this rule in place, it eliminates the risk of sharp price drop.
However, Coffeezilla busted the developer and KIDS promoters as it’s revealed that the mechanism was bypassed a day before it launches. From the 24-hour limit, it became 60 seconds to allow promoters to dump their holdings at a profit.
