Uncovering the outrageous scam: The project owner hired a group of trolls to impersonate celebrities and sell cryptocurr

Original article by Ryan S. Gladwin , Decrypt

Original translation: Felix, PANews

A nutritional supplement company allegedly hired a group of trolls to impersonate celebrities, defraud investors, and sell its tokens. The scheme worked for a while, but has since been unravelled.

Insane Labz, an Arkansas-based supplement company with a strong reputation in the MMA and Barstool Sports worlds and a former client of Gary Vaynerchuk’s entrepreneurial mentoring program, launched its LABZ token in May, and in its roadmap, the project promised to work with “vetted celebrities.” But the project encouraged trolls to impersonate celebrities, such as UFC president Dana White, MMA legend Nate Diaz, and social media personality Hasbulla, and tout LABZ tokens 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 these obvious 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 trying to do it as a joke but it got a little out of hand,” one of the impersonators said.

“Hasbulla” enters the chat, and some investors question whether it is really Hasbulla

Hasbulla joined the chat

On May 16, the first fake celebrity, “TheOfficialHasbulla,” joined the Insane Labz Telegram chatroom. The account appeared to belong to Hasbulla Magomedovich Magomedov, an influencer with dwarfism who has 8 million followers on Instagram. The real Magomedov doesn’t speak English, so the fake influencer was able to communicate using Google Translate and GIFs.

Still, some users in the chat questioned whether he was real. The administrator of the Insane Labz Telegram group was vague. “Maybe he is real,” Insane Labz replied in the Telegram group.

Users responded immediately.

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

LABZ-linked wallets sold under the name “Hasbulla” hype 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 over $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.

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

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

“Hasbulla has no knowledge of this company or its tokens,” said Justin Ozuna, Hasbulla’s business manager, who helped Hasbulla secure a five-year promotional contract with the UFC. “I highly doubt the same is true for Dana White and Nate Diaz.”

Another LABZ token investor said the project not only encourages impersonators, but also “strongly promotes this joke.” Insane Labz “created LABZ token memes with celebrities’ faces and hyped them up whenever a celebrity posted something in the 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, which included 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 screenshots of photos from the Insane Labz Telegram group.

According to the Insane Labz account, Dana White had a FaceTime call with the LABZ team

On May 28, the fake Dana White told the official Insane Labz Telegram group that he was planning 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 impersonator claimed that the official Insane Labz account contacted the fake Dana White and offered to pay the “villain” and his friends to continue messaging them in the Telegram chat. 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 imposter 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 imposter. The original DvFne 1 wallet also funded the address FtfPXX that minted LABZ tokens.

“We can assume that the central wallet (DvFne 1) is a team wallet, as it is the first wallet to fund FtfPXX, which is the minting wallet,” said Thomas Perrin, lead investigator at Bubblemaps. “Thus, 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) was suspicious. “Why not use a wallet with a marketing label?”

Bubble chart showing how payment wallets are associated with minting addresses

We also reviewed Telegram screenshots provided by the impersonators, which they said showed the Labz team 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 impersonators’ wallets, who claimed they were sent by Insane Labz. Meanwhile, LABZ token investors were misled into believing the celebrity endorsement was real.

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

Conversations between the impersonators and Insane Labz make it clear that the project actively encourages this type of deception. In another Telegram group called “Labz UFC Hype Group,” the operator of the Insane Labz account joked with the fake celebrities, according to screenshots provided by the impersonators.

The fake Nate Diaz wrote in a private message: I thought the real Nate would be mad now lol. The Labz account replied: Hahahaha you are the real Nate…

The most obvious impersonation was of Hasbulla, who did not 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 Hasbullas text-to-speech AI to create a voice note.

The Labz account responded: Thats disgusting.

Fake Hasbulla considered using AI

The fake celebrities said their Telegram inboxes were flooded 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 inflate the token price,” said one LABZ token investor. “I sold my tokens at that time and left the group.”

LABZ token investors regularly message these trolls, asking them if they are real

The truth came to light

Eventually, the hype died down and the token price fell. In response, the impersonator claimed that 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 surged 17%. But it was short-lived. The token fell 74% over the next two weeks. Communication between the fake star and Insane Labz began to break down.

After someone joined the Labz group chat and sent a message to 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 its over, the pranksters say they have no qualms about impersonating celebrities.

“I’ve been using this nickname for years and have been in hundreds of Telegram groups — no one has ever played tricks on me like this,” the fake Hasbulla said. “Anyone with a brain can tell that this is just a Telegram nickname.”

Before its foray into cryptocurrencies, 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 generates about $15.2 million in revenue annually, according to Zoominfo data.

The company’s founder and CEO, Dustin Lebleu, is a client of VaynorMentors, a startup consulting services firm run by renowned 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 out 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.

This article is sourced from the internet: Uncovering the outrageous scam: The project owner hired a group of trolls to impersonate celebrities and sell cryptocurrencies

Related: The current state of VC survival: the hellish primary market and the locked “paper wealth”

Author: Mia, ChainCatcher Original editor: Marco, ChainCatcher Retail investors attributed the reason for losing money to the token issuance strategy of high FDV (future discounted value), low circulation, believing that VCs and project parties conspired to unlock a large number of tokens, which impacted the crypto market. VCs are crying out for injustice, defining the primary market of this cycle as hellish difficulty. Li Xi, partner of LD Capital, said that this years books are profitable, but its all paper value, because the shares belonging to VCs are still unlocked at 0. Except for the VCs who assemble the game, most VCs are big leeks who take over. ChainCatcher interviewed several representatives from the VC industry, trying to understand the current survival status of VC. Many VCs said that there…