“Plus ça change, plus c'est la même chose” – Jean-Baptiste Alphonse Karr
I bet you don’t know what the FaZe Clan is or that it has permanently cut ties with FaZe Kay and suspended FaZe Jarvis, FaZe Nikan, and Faze Teeqo for their roles in the SaveTheKids shitcoin pump-and-dump rug pull? Or that the attorneys for FaZe Kay – or is it just Kay now – have sent a cease-and-desist letter to Coffeezilla for his role in exposing the scandal? Or that somebody called RiceGum has been quietly deleting old SaveTheKids promo tweets and an Instagram supermodel named Sommer Ray regrets her first foray into shitcoins? Or that these people have a combined social media following well in excess of 100 million? Of course you don’t – that’s why you subscribe to Doomberg. I go down the rabbit holes so you don’t have to. After finishing this piece, you are absolutely going to dominate the discussion at the bingo hall tonight. You’re welcome.
So, pump-and-dump schemes. Those reliable little cons are as old as time itself. And yet, people keep falling for them. Here’s a rough outline of how they work: some Bad People create and/or accumulate a lot of Worthless Stuff. They give a fair bit of that Stuff to some Popular People, usually for free, and then those Popular People set about the task of getting a bunch of Naive People excited about buying that Stuff, thereby increasing the price (“The Pump”). Once the price is high enough, the Bad People and the Popular People sell their Worthless Stuff to the newly-excited Naive People for ill-gotten gains (“The Dump”), at which point the price of the Stuff collapses back to worthless and the previously excited Naive People usually become quite agitated.
In the vortex of cryptocurrencies (the Stuff), their developers (the Bad People) and social media influencers (the Popular People), this pattern of events happens so often there’s a name for it: the shitcoin rug pull. In the pantheon of shitcoin rug pulls, the SaveTheKids fiasco is quite spectacular. And nobody is doing a more entertaining job of exposing the latest incarnations of this timeless fraud than the prolific YouTuber Coffeezilla.
I came across Coffeezilla’s YouTube channel while researching tether. He put together a devastating and tightly edited exposé on tether that brilliantly captures the essence of the scam. You can watch the video here. Clearly, Coffeezilla and his team (I assume he has a team?) do great work. I admire the branding, the feel, the humor, and the intellectual rigor of it all. I couldn’t help but become one of his more than 500,000 subscribers.
From there, it was a short trip to Coffeezilla’s excellent work on the SaveTheKids coin. What is SaveTheKids? This Stuff falls into a particularly egregious category of shitcoins known as charity coins, where the Bad People work with the Popular People to deceive Naive People into thinking that their Worthless Stuff is part of a movement to do something good for a worthy cause. Who wouldn’t want to save the kids? Are you against saving kids or something? We don’t yet know who the Bad People were in this affair, but there sure were a lot of Popular People involved. Here’s FaZe Kay, back when he was still known as FaZe Kay, doing his part to pump the SaveTheKids coin:
Hang on… G58… BINGO!!!
Anyway, at this point you may be asking yourself just what is the FaZe Clan and why are their members Popular People? As it turns out, the FaZe Clan is a professional e-sports and entertainment organization that has been in business since 2010. I don’t really know much about this vibrant part of our culture except that its reach is undeniably huge. In keeping with the hard-hitting original research you’ve come to expect from Doomberg, I did have this text exchange with my 16-year old son (who, oddly enough, is not a chicken, but does happen to play a lot of online video games):
In the end, it doesn’t really matter who the FaZe Clan is, or who Sommer Ray is, or who RiceGum is, and so on. All that really matters is they are Popular People who either collaborated with or were tricked by some Bad People to sell Worthless Stuff to Naive People. You can imagine how the story unfolds from there.
Last month, SaveTheKids started trading under the crypto symbol KIDS (aw, how cute!) and initially skyrocketed higher. “Yay! This is some Great Stuff!” exclaimed the Naive People. Except, of course, it was all downhill from there. Really downhill. The Bad People and at least some of the Popular People hurriedly sold as much Stuff as they could, leaving the Naive People to hold their digital bags. That’s when the Naive People became agitated, and the scandal exploded.
Here’s the SaveTheKids price chart from inception, courtesy of coingecko.com. Can you spot on the chart where the Bad People and Popular People sold?
One might be tempted to assume this is a rare exception in the crypto universe, sensational as this episode might be. Perhaps, but consider the following: recently, our old friend Sam Bankman-Fried (a charter member of the crypto Bad People club) gleefully announced that sports legend Tom Brady and his supermodel wife Giselle Bündchen, both Extremely Popular People, agreed to become brand ambassadors for FTX, Bankman-Fried’s cryptocurrency exchange. I wonder what Stuff they’ll soon be getting Naive People excited about?
Plus ça change indeed.
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