MLG Crypto Scam: FaZe Banks' $200M Exit Sparks SEC Scrutiny on Influencer Tokens
2025-07-29 08:51:23FaZe Banks Steps Down as CEO Amid $200M MLG Coin Scandal: Inside the Crypto Feud with Adin Ross
"I’ve never scammed anyone a day in my life," declared FaZe Banks in an emotional farewell post—but the internet isn’t buying it. The former FaZe Clan CEO’s resignation on July 28, 2025, has sent shockwaves through the crypto and gaming communities, following explosive allegations of a $200 million "rug pull" tied to the MLG meme coin. Leaked messages reveal a bitter feud with streamer Adin Ross, accusations of a smear campaign, and a token crash that left investors reeling. Here’s what we know.
The Rise and Fall of MLG Coin: A Meme Token Gone Wrong
From $3M to $200M—Then Collapse
MLG Coin (360noscope420blazeit), a Solana-based meme token branded as gaming’s "culture coin," launched in late 2024 with heavy promotion from FaZe Clan. By January 2025, FaZe Banks and other members hyped the project, sending its market cap skyrocketing from $3 million to over $200 million in days. But the euphoria was short-lived. The token’s value plummeted soon after, with investors accusing insiders of a "rug pull"—a scam where early promoters cash out, leaving others with worthless assets.
Leaked Chats Ignite War with Adin Ross
The scandal erupted on July 28 when a screenshot from an MLG investor group chat went viral. In it, Banks blamed Adin Ross for the crash, claiming Ross’s ego led him to spin a "false narrative" after the community used him as "exit liquidity" (a tactic where late buyers absorb losses as early sellers profit). Banks insisted he never sold his coins, writing:
"I ran this thing up from $3M to $200M organically… NEVER EVER SOLD. The only bad actor here is Adin. Point blank. Period."
Ross confirmed the screenshot’s authenticity but denied involvement, tweeting:
"The Banks screenshot is real. Shit’s sad asf… Truth will come out."
Banks’ Exit: A Smear Campaign or Guilty Conscience?
"Destroying My Life Inside and Out"
Hours after the leak, Banks announced his departure from FaZe Clan and social media, citing mental health strain. He claimed the "FaZe" name made him an easy target for manipulation and hinted at a $50K smear campaign against him. In an Instagram Story, he shared a DM alleging payments to social media pages to "place blame" on him.
Yet skepticism lingers. Banks posted proof of a $106,475 loss on MLG Coin, calling it the "worst ‘scam’ ever". But critics argue losses don’t absolve pump-and-dump claims, especially with retail investors left holding the bag.
FaZe Clan’s Silent Crisis
FaZe Clan has stayed silent, leaving fans questioning its future. The org, already struggling after going public in 2022, now faces reputational damage—and Ross’s 20% equity stake adds another layer of drama.
Crypto’s Influencer Problem: A Repeating Pattern
The MLG saga mirrors past crypto scandals, like Logan Paul’s CryptoZoo or FTX’s collapse, where celebrity endorsements masked risky ventures. Analysts warn:
"Influencer-backed tokens often lack transparency," says David A. Banks, author of The City Authentic. "The hype-to-crash cycle is becoming a dangerous norm."
Regulatory gaps persist. The SEC has yet to comment, but the FTC recently cracked down on deceptive crypto promotions.
Market Impact and What’s Next
MLG Coin’s Ironic Bump
Despite the drama, MLG Coin saw a 24-hour price surge on July 29, likely from speculative trading. Yet most analysts dismiss this as noise, noting meme coins’ volatility.
Key Lessons for Investors
DYOR (Do Your Own Research): Avoid FOMO-driven buys.
Beware of "Culture Coins": Gaming-themed tokens often lack utility.
Watch for Exit Liquidity Tactics: Early promoters may dump on retail.
Share Your Thoughts
Was Banks unfairly targeted, or is this crypto’s latest cautionary tale? Share your thoughts on our X.
Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.
Sources:
Times of India: What did FaZe Banks do? FaZe CEO accused of $200M crypto scam and rug pulling with Adin Ross
Hindustan Times: Banks steps down as CEO of FaZe amid drama with Adin Ross over crypto scam
Esports.gg: FaZe Banks “Scam”: Quits as CEO amidst MLG Coin drama with Adin Ross
Tribune: FaZe Banks says $50K hate campaign targets him as crypto feud with Adin Ross escalates
The Guardian: Crypto was meant to solve financial corruption. The FTX scandal shows it’s got worse