Revealing an outrageous scam: Project parties hire fake accounts to impersonate celebrities and sell cryptocurrency

Original Title: “How a Sports Brand Used Fake Celebs to Pump an 'Insane' Cryptocurrency”

Author: Ryan S. Gladwin, Decrypt

Translation: Felix, PANews

A nutrition supplement company allegedly hired a group of online trolls to impersonate celebrities, deceive investors, and promote its tokens. The scheme worked for a while but was later exposed.

Insane Labz is a supplement company based in Arkansas, well-known in the MMA (Mixed Martial Arts) and Barstool Sports circles, and was a former client of Gary Vaynerchuk's entrepreneurial mentorship program. Insane Labz launched the LABZ token in May, promising to collaborate with "verified celebrities" in its roadmap. However, the project encouraged trolls to impersonate celebrities like UFC President Dana White, MMA legend Nate Diaz, and social media personality Hasbulla, heavily promoting the LABZ token in the project's Telegram group.

This scam helped the market cap of the LABZ token soar from $3 million to a peak of $15 million. The token is now nearly worthless, having dropped over 90%. But before that, these obvious scams tricked some less savvy investors into buying in.

Blockchain data reviewed by Decrypt and blockchain analytics firm Bubblemaps shows that crypto wallets associated with the Insane Labz team paid a small fee to this group of trolls, $155 in Solana each.

"We were just trying to have a laugh, but it got a bit out of hand," one of the impersonators said.

“Hasbulla” enters the chat, with investors questioning whether it is really Hasbulla

“Hasbulla” Joins the Chat

On May 16, the first fake celebrity, “TheOfficialHasbulla,” joined the Insane Labz Telegram chat. The account appeared to belong to Hasbulla Magomedovich Magomedov, a social media star with dwarfism who has 8 million followers on Instagram. The real Magomedov does not speak English, so the impersonator could only communicate through Google Translate and GIFs.

Despite this, some users in the chat questioned whether he was real. The administrators of the Insane Labz Telegram group were vague about it. "Maybe he is real," Insane Labz replied in the Telegram group.

Users immediately reacted to this.

The LABZ token surged 115% within 12 hours. At that time, wallets associated with the company had not yet paid the fake Hasbulla. During this period, two wallets linked to Insane Labz sold about $12,450 worth of LABZ tokens while also buying more tokens.

Wallets associated with LABZ sold under the name “Hasbulla” heavily promoted the project

The largest single sale of LABZ occurred three days later on May 19, when the token's price, although past its peak, was still high. An unidentified whale sold over $70,000 worth of tokens, making a profit of about $68,000 after buying LABZ on the token's launch day.

The Hasbulla impersonator stated that his friends joined the group in the following weeks: the fake UFC President Dana White and the fake UFC fighter Nate Diaz.

The Nate Diaz impersonator explained that the fake Hasbulla often joined some groups, pretending to be the famous Dagestani. "Then when we saw Insane Labz's crazy reaction to Hasbulla joining the chat, we thought we’d switch it up and get in on the joke," he said.

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

Hasbulla's business manager, Justin Ozuna, stated, "Hasbulla has no knowledge of this company or its tokens." Justin Ozuna helped Hasbulla secure a five-year promotional contract with the UFC. "I highly suspect that the same goes for Dana White and Nate Diaz."

Another LABZ token investor noted that the project not only encouraged impersonators but also "strongly promoted this joke." Insane Labz "made LABZ token memes using celebrities' faces and heavily promoted them whenever a celebrity posted 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's founder posted a FaceTime chat with 'Dana White,' asking 'Dana' if he had a screenshot of the chat." Members of the Telegram chat (including some impersonators and individual investors) stated they believed it was Dustin Lebleu managing the account.

The investor said, "He later posted what I think is a doctored FaceTime chat photo," providing a screenshot of 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 impersonated Dana White told the official Insane Labz Telegram group that he planned to give away four tickets to an upcoming UFC event. The Insane Labz team seized the opportunity and promoted the giveaway on Twitter. The LABZ token rose 17% as a result, and it was at this time that the Labz team contacted the impersonated White, proposing to pay him to continue the scam.

The impersonators claimed that the official Insane Labz account contacted the impersonated Dana White and offered to pay this "villain" and his friends to keep sending messages in the Telegram chat. Ultimately, they reached an agreement to pay 1 Solana (about $155) per week.

Data company Bubblemaps found that one of the wallets sending 1 SOL ($150) payments was linked to the wallet that originally created the LABZ token. Wallet DvFne1 sent 150 SOL ($24,000) to wallet CLrC8m, which later paid the impersonators a total of 3 SOL ($459). The original DvFne1 wallet also funded the address FtfPXX that minted LABZ tokens.

Bubblemaps chief investigator Thomas Perrin stated, "We can assume that the central wallet (DvFne1) is a team wallet because it was the first wallet to fund FtfPXX, which is the minting wallet." "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 marketing tags?"

Bubble chart shows how the payment wallet is linked to the minting address

Additionally, screenshots provided by the impersonators were reviewed, claiming these screenshots showed the Labz team coordinating payments and providing transaction links at the time of payment.

"The Whole Thing is a Fraud"

In the following month, a total of 15 SOL was sent to the impersonators' wallets, which they claimed were sent by Insane Labz. Meanwhile, LABZ token investors were misled into believing that the celebrity endorsements were real.

An Insane Labz investor said, "I realized the whole thing is a fraud."

Conversations between the impersonators and Insane Labz clearly indicate that the project actively encouraged this deceptive behavior. According to screenshots provided by the impersonators, in another Telegram group called "Labz UFC Hype Group," operators of the Insane Labz account joked with the fake celebrities.

Fake Nate Diaz wrote in a private chat, "I thought the real Nate would go crazy right now haha." The Labz account replied, "Hahaha, you are the real Nate…"

The most obvious act of impersonation was Hasbulla, who does not speak English, yet the impersonator spoke fluently in the chat. Screenshots show that at one point, this Hasbulla impersonator stated he would try to find an AI for Hasbulla's text-to-speech to create voice notes.

The Labz account responded, "That's disgusting."

Fake Hasbulla considered using AI

These fake celebrities reported that their Telegram inboxes were flooded with hundreds of messages and calls from fans wanting to prove they were real.

One LABZ token investor stated, "I found the whole thing to be a fraud, and the founders knew perfectly well that these people were not the real Dana White and others, but were using their celebrity effect to inflate the token price." "I sold my tokens and left the group."

LABZ token investors regularly messaged these trolls, asking if they were real

The Truth Comes Out

Eventually, the hype began to die down, and the token price fell. In response, the impersonators claimed the Labz team asked them if they could add Nickelback's lead singer Chad Kroeger. They agreed.

After adding a fake Kroeger account on June 27, the token rose 17%. But this was short-lived. The token dropped 74% in the following two weeks. Communication between the fake stars and Insane Labz began to break down.

After someone joined the Labz group chat and messaged "Dana White," the Insane Labz team instructed the impersonators to stop speaking. That night, the Telegram chat was deleted. Insane Labz claimed on its official X account that the group was deleted because they received death threats.

Now that it’s all over, these pranksters stated they felt no remorse for impersonating celebrities.

Fake Hasbulla said, "I've been using this nickname for years and have appeared in hundreds of Telegram groups—no one has ever played me like this." "Anyone with a bit of brain can tell this is just a Telegram nickname."

Before venturing into cryptocurrency, Insane Labz, based in Arkansas, was founded in 2014 and became known for its sports powders. According to Zoominfo data, its products are sold through online retailers like Amazon and Walmart, with the company generating about $15.2 million in annual revenue.

The company's founder and CEO, Dustin Lebleu, is a client of VaynorMentors, a startup consulting service run by renowned entrepreneur Gary Vaynerchuk (better known as Gary Vee).

Gary Vaynerchuk praised Dustin Lebleu in a blog post in 2019, but that blog post has since been deleted.

A representative for Gary Vaynerchuk stated, "Gary is out with family this week, but we can confirm that there has been no official association or endorsement between Gary/VaynerX and Insane Labz since their brief consulting partnership in 2018."