Jimmy Donaldson, known as MrBeast, the YouTube sensation with over 320 million subscribers, has found himself at the center of a crypto controversy. Known for his extravagant stunts and large-scale giveaways, MrBeast is now under scrutiny for allegedly earning over $10 million through low-cap cryptocurrency investments.
These claims were made by a well-known crypto investigator, SomaXBT, whose on-chain research suggests that MrBeast backed a series of Initial DEX Offerings (IDOs), then profited from significant price surges before selling off his tokens.
The Allegations and Projects Involved
According to the investigation, MrBeast invested in multiple small-cap projects, including SuperFarm (SUPER), Polychain Monsters (PMON), SPLYT (SHOPX), and Virtue Poker (VPP), among others.
One of the more notable examples is his alleged involvement in SuperFarm. SomaXBT claims that MrBeast invested $100,000 in SuperFarm, a project backed by another crypto influencer, Elliot Trades. In return, he received 1 million SUPER tokens. The price of the token surged after MrBeast’s involvement, allowing him to cash out a significant portion of his holdings for around 1,900 ETH, valued at approximately $3.7 million at the time.
However, his earnings from SuperFarm didn’t stop there. MrBeast reportedly made an additional $5.5 million through vested tokens, bringing his total profits from SuperFarm to about $9 million.
Similar patterns emerged in other projects. For example, a $25,000 investment in Polychain Monsters allegedly resulted in $1.7 million in profits.
The Ethical Debate: Pump-and-Dump or Smart Investments?
SomaXBT’s report has sparked debate within the crypto community, with many questioning the ethical implications of these activities.
The term “pump-and-dump” has been widely associated with these types of trades. In these schemes, an influencer promotes a low-cap token, driving up its price by leveraging their massive following. Once the price peaks, they sell off their holdings, leaving smaller investors with losses when the value drops sharply.
Many of the tokens promoted by MrBeast, such as Polychain Monsters and Virtue Poker, have since plummeted in value, with some experiencing over 90% devaluation. Critics argue that if these actions were to take place in traditional financial markets, regulators like the SEC would likely intervene. SomaXBT pointed out that if influencers engaged in similar behavior in the stock market, they could face serious legal repercussions.
However, defenders of MrBeast argue that his involvement in these tokens may not necessarily have been malicious. Some believe he could have simply been making strategic investments that, while profitable for him, didn’t work out for the broader market. MrBeast himself has yet to address the allegations, leaving the community waiting for his response.
Implications for the Crypto Space
The rise of decentralized finance (DeFi) and IDOs has provided opportunities for massive gains but also presents risks for retail investors who may be swayed by celebrity endorsements. The lack of regulatory oversight in the crypto space means that these promotional activities can occur with little to no legal consequences. However, this could change as governments and regulators continue to scrutinize the market.
Final Thoughts
The on-chain investigation into MrBeast’s involvement with low-cap crypto tokens has raised serious questions about the ethics of influencer marketing in the cryptocurrency industry.
This sends an important message to all investors to conduct thorough research and approach influencer-backed crypto projects with caution.