MrBeast sparks ethical uproar after earning 10 million from low cap altcoin dump

Popular YouTuber MrBeast allegedly engaged in a promote-and-dump crypto scheme—at least according to a vigilant blockchain analyst. 

The accusations come after MrBeast—whose real name is Jimmy Donaldson—was seen to earn around $10 million from dumping low-cap altcoins. The observations were brought up by blockchain investigator SomaXBT on X. 

The critical crypto sleuth said that MrBeast “allegedly made $10M+ by backing low-cap [Initial DEX Offerings] tokens promoted by influencers like Lark Davis, CryptoBanter, KSI, and others”, adding that several of these crypto projects have dropped by over 90%. 

1/ An investigation into @MrBeast ,how he allegedly made $10M+ by backing low-cap IDO crypto tokens promoted by influencers like Lark Davis, CryptoBanter, KSI, and others. Many of these projects are now down over 90%, with some rebranding after major losses.

let's dive in. 🧵 pic.twitter.com/NR9dq9ZnD2

— SomaXBT (@somaxbt) October 11, 2024

Cointelegraph reported that MrBeast allegedly shelled out $100,000 on SuperFarmDAO. The prominent YouTube figure then purportedly used his influencer status to boost the SUPER token. This was before he eventually dumped shares in what appears to be a pump-and-dump scheme. 

As a result, MrBeast converted a large number of SUPER tokens—valued at millions of dollars—into Ether. SomaXBT further noted that the funds were transferred across a couple of wallets, ultimately leading to a profit of more than $9 million. 

The pseudonymic on-chain analyst highlighted that the allegations were based on activities of a wallet called Mr.Beast on the Arkham Intelligence platform, adding that there had been similar instances in the past.

Previously, MrBeast allegedly made $1.7 million by investing $25,000 in the play-to-earn game Polychain Monsters. He also earned $1.25 million and $765,000 from STAK and SHOPX tokens, respectively. 

The crypto sleuth also stated that MrBeast supported non-fungible tokens (NFTs) in the past, as the influencer “openly promoted VeeFriends from Gary Vee on Twitter”. The creator eventually spent a whopping $1.25 million purchasing them. 

15/ With all this, MrBeast also showed his support for NFTs. He openly promoted VeeFriends from Gary Vee on Twitter and spent $1.25 million to buy them. Additionally, he has traded various NFTs. pic.twitter.com/iZ097TdwNa

— SomaXBT (@somaxbt) October 11, 2024

Pump-and-dump crypto scheme 

Whether these steps were made unintentionally or deliberately remains unclear. Moreover, though MrBeast did not go against any laws in this alleged feat, these activities have still sparked ethical concerns within the larger crypto community. 

It is also important to note that though these moves have been associated with the alleged MrBeast wallet, they do not automatically imply that the famous YouTuber himself was behind all of these trades. 

Nevertheless, these cases offer insight into a bigger issue that the crypto community is faced with. Several insiders in the industry think that the pump-and-dump scheme for low-cap tokens is damaging to the crypto landscape. 

Per SomaXBT, if such feats took place in the regulated stock market, SEC and authorities would have intervened. 

Mike Kremer, a data engineer from Messari, also noted that these malicious activities could damage the crypto project itself and the wider industry as a whole. 

According to Coinbase, a pump-and-dump scheme in the world of crypto is a tactic for manipulating the market. It mainly involves artificially inflating a token's value in order to attract potential investors. 

Later on, holders sell off their huge share of tokens, resulting in a sudden crash that leads to a supply hike and price drop. As a result, other investors are left victimized by the scheme. Since the assets barely retain any value, their prices do not recover much or at all after the dump. 

Influencer and creator impacts 

As the world of crypto remains largely volatile and unregulated, influencers with massive social media following may get a disproportionate say on things—indirectly having a hand in price manipulation. However, the line between opportunistic behavior and legitimate promotions has become a gray area for investors, as reported by Cryptonomist. 

With 320 million subscribers, MrBeast is currently the most-followed YouTube creator—which is a stature that reflects his great influence to the wider community. As MrBeast has such a great sphere of influence, it is not surprising that his simple promotions could affect prices of certain crypto projects and altcoins. 

However, the issue is this: when the influencer opts to cash out holdings when prices see artificial inflation. As the community of investors is largely unaware of these dubious moves, they end up facing grave losses. 

Though these behaviors do not violate any laws, the allegations have sparked questions regarding ethics for influencers and creators when it comes to the bull and bear market in the wider crypto landscape. After all, trust and transparency are crucial ingredients in the system.