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FaZe Clan distances itself from members who participated in Save The Kids crypto charity – The Esports Observer

On Thursday evening esports organization FaZe Clan announced via social media that it had  cut ties with Frazier “FaZe Kay” Khattri and suspended members Jarvis “FaZe Jarvis” Khattri, Nikan “FaZe Nikan” Nadim, and Jakob “FaZe Teeqo” (last name unknown) “until further notice.” The announcement from FaZe occurred after internet sleuths uncovered transaction details related to a charity-based cryptocurrency called “Save The Kids,” an obvious play on the well-known charity, Save The Children, and other altcoins pushed to the community as part of an alleged on-going “pump and dump scheme.” 

While FaZe Kay was essentially fired from the organization and three others suspended, many individuals have been involved in similar altcoin promotions including Adin Ross (who lives with FaZe co-founder Richard ‘FaZe Banks’ Bengston in the “Clout House). Other people such as influencer Sommer Ray and YouTuber RiceGum (who also lives in “the Clout House” with Banks) were also involved in the Save The Kids charity scheme.

Save The Kids Token

The reason behind the expulsion and suspensions stem from the Save The Kids altcoin $KIDS that was being promoted by the high-profile ambassadors from the North American gaming scene, including the aforementioned members from FaZe Clan. The marketing for the altcoin primarily focused on its charitable aspects. According to the altcoin’s white paper, token transactions came at a three percent fee, which was split evenly across a liquidity pool, redistribution, and charity.

Following a private pre-sale to roughly 200 investors – according to a document published by the Save The Kids marketing team, on June 5, the altcoin was launched with a total supply of one billion tokens. While the altcoin’s operators initially communicated that its ambassadors “are not paid by us and are not given ANY $KIDS tokens,” it later turned out that ambassadors were either given the tokens for free as compensation, saw the token purchased by others and then given to the ambassadors, or the ambassadors purchased the token at a very discounted rate through a pre-sale purchase.

Within just four hours of the $KIDS launch, the token’s market price shot up almost 500% and crashed back down below its initial price. During that crucial time the altcoin experienced a short but effective pump driven by public buyers, urged on by their favorite content-creating ambassadors from FaZe Clan and others. The successful pump was promptly followed by a big dump as mostly pre-sale investors divested from the token to secure big wins, consequently driving the market price back down. All of that happened despite heavily marketed anti-whale measures that were supposed to prevent such a dump. In a statement, the $KIDS team later admitted that there was “a decimal issue with the transaction limit.” 

However, it wasn’t the Binance charity that ended up making the bulk of the money, it was the ambassadors such as FaZe Kay and the others that ended up getting the lion’s share of the money by selling their holdings while the price was at a certain threshold of value. According to a smart contract security audit by TechRate, the altcoin had 7,127 holders, 19,201 transactions, and its top 100 investors held 77.92% of all outstanding $KIDS tokens as of June 5.

The internet sleuth known as Coffeezilla (real name unknown) released a video on YouTube explaining the situation: “I’ve traced some of these influencers’ crypto wallets and will be revealing what they did with the crypto coins they’ve promoted to you and are now trying to hide the evidence now that it’s all coming out.”

While the amount of money each of these ambassadors made is still being calculated, there is clear evidence that FaZe Clan members such as Kay and Nikan continuously waited and sold their shares of the coin when they were at their highest value. This, often referred to as “pump and dump” (a term largely associated with stock manipulation schemes) was done numerous times.  

In its statement the organization said it had no prior knowledge of its members activities, yet the company employs a number of talent management execs to oversee talent including senior talent manager Jordan Galen, director of talent Vera Salamone, Darren Yan head of talent management (a former UTA esports talent manager), and outside talent agency UTA, which signed a deal with FaZe in February

It seems that even those who are not a part of FaZe but are in Banks’ orbit, such as Clout House member Adin Ross have also been involved in pushing altcoins. During a June 18 Twitch stream, Ross laughed about people buying an altcoin that he promoted called MILF Token: “Chat, by the way, that MILF Token shit I did a while back… I already told you guys, don’t buy that shit, he said. “I got paid a bag to do that shit,” he said, adding, “I don’t give a fuck… Hope none of you guys actually bought it.” 

The Esports Observer has reached out to FaZe Clan for comment and will update this story if they respond.

 

Tobias Seck contributed to this story.


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