Australia markets closed
  • ALL ORDS

    7,664.20
    -31.00 (-0.40%)
     
  • ASX 200

    7,392.60
    -24.80 (-0.33%)
     
  • AUD/USD

    0.7387
    -0.0011 (-0.15%)
     
  • OIL

    73.08
    -0.54 (-0.73%)
     
  • GOLD

    1,831.40
    -4.40 (-0.24%)
     
  • BTC-AUD

    53,992.94
    -478.82 (-0.88%)
     
  • CMC Crypto 200

    948.49
    +18.13 (+1.95%)
     
  • AUD/EUR

    0.6209
    -0.0009 (-0.14%)
     
  • AUD/NZD

    1.0544
    -0.0001 (-0.01%)
     
  • NZX 50

    12,594.52
    -134.33 (-1.06%)
     
  • NASDAQ

    15,048.36
    +30.26 (+0.20%)
     
  • FTSE

    7,078.42
    +61.79 (+0.88%)
     
  • Dow Jones

    35,084.53
    +153.60 (+0.44%)
     
  • DAX

    15,640.47
    +70.11 (+0.45%)
     
  • Hang Seng

    25,844.66
    -470.66 (-1.79%)
     
  • NIKKEI 225

    27,283.59
    -498.83 (-1.80%)
     

YouTubers in hot water for crypto pump and dump scheme

·2-min read
Popular YouTuber FaZe Kay and depictions of different digital currencies
Popular YouTuber FaZe Kay has been booted from FaZe Clan after promoting a crypto pump and dump scheme (Source: Instagram @FazeKay/Getty)

This is why you shouldn't get your crypto advice from online personalities.

Three members of FaZe clan, a popular group of esports competitors and entertainers with millions of fans, have been called out for promoting a pump and dump crypto scheme.

FaZe announced that Frazier Khattri "Kay”, a 25 year old english YouTuber and Twitch streamer, had been removed from the esports group.

Meanwhile two other members, Nikan and Teeqo, have been suspended.

“FaZe Clan had absolutely no involvement with our members’ activity in the cryptocurrency space and we strongly condemn the recent behaviour,” FaZe said in a statement.

“The trust and respect of our fans has been, and will always be, our number one priority.”

This content is not available due to your privacy preferences.
Update your settings here to see it.

What does pump and dump mean?

Pump-and-dump is a manipulative scheme that attempts to boost the price of a stock or security through fake recommendations, according to Investopedia.

“The recommendations are based on false, misleading, or greatly exaggerated statements. The perpetrators of a pump-and-dump scheme already have an established position in the company's stock and will sell their positions after the hype has led to a higher share price,” Investopedia said.

What was the pump and dump scheme?

The pump and dump scheme these popular YouTubers and professional gamers have landed in trouble for involved the Save the Kids cryptocurrency project.

Save the Kids (aka KIDS) was pitched as a charity that would donate 1 per cent of each transaction fee (which itself was 3 per cent of the total transaction) to a child-oriented foundation.

The creators got influencers at FaZe to promote KIDS ahead of its launch in early June, only to watch as the price crashed by almost 90 per cent.

The affected clan members denied any deliberate involvement.

Kay said he had "no ill intent" in promoting KIDS, and that he made a mistake in participating without vetting the effort with the team.

This is not the first time FaZe team members have faced accusations of promoting scams. Kay had previously been paid to promote another coin, BankSocial, in May. He then sold all his holdings shortly before exiting the partnership.

The news highlights the growing number of eSports players making money outside of competitive gaming, both individually and as a team as esports builds up a larger audience.

Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting