- Logan Paul sued Coffeezilla in June for defamation after digging into CryptoZoo.
- Coffeezilla believes the lawsuit will silence him on his investigation into another Logan Paul company, Liquid Marketplace.
- The Ontario Securities Commission has opened an investigation into Liquid Marketplace.
Cryptocurrency crime reached a staggering $24.2 billion in 2023, according to Chainalysis research, with scams constituting a significant portion of this figure. Common crypto-related scams include romance, phishing attacks, pump-and-dump schemes, and false promises of guaranteed returns.
Participants in Logan Paul’s CryptoZoo project accused it of being a scam after purchasing tokens and NFTs, only for the game to fail to materialize. As a result, the YouTuber is now facing a class action lawsuit from disgruntled investors.
Despite the weight of evidence against Logan Paul, he sued investigative YouTuber Coffeezilla, also known as Stephen Findeisen, in late June for defamation. In a new twist, Coffeezilla has responded to the CryptoZoo lawsuit, suggesting it may be a diversionary tactic to prevent the release of information about another alleged scam involving Paul.
Logan Paul in the Firing Line
Coffeezilla has now publicly responded to the CryptoZoo defamation lawsuit filed by Logan Paul in June. Coffeezilla claimed that the lawsuit was meritless and motivated by an attempt to silence his investigation into Liquid Marketplace, a company co-founded by Paul.
Liquid Marketplace launched in April 2022 and enables users to ‘co-own’ rare and high-value collectibles, such as sought-after physical Pokémon cards or digital NFTs, through fractionalized tokenization.
Logan Paul is prominently featured on the website and has conducted promotional campaigns to raise platform awareness.
Coffeezilla began investigating Liquid Marketplace after hearing rumors about potential issues within the company. However, the investigative YouTuber stressed that his investigation is in its early stages and an attempt to verify information rather than accusatory.
Coffeezilla Gets Snubbed
As part of the investigative process, Coffeezilla sought to arrange an interview with Liquid Marketplace’s CEO, Ryan Bahadori. According to Coffeezilla, Bahadori initially agreed to a Zoom interview but failed to appear.
After the missed interview, Coffeezilla raised the issue with Paul, who reportedly agreed to encourage Bahadori to participate in the interview. However, despite follow-up reminders, Paul and Bahadori continued evading Coffeezilla’s inquiries.
The investigative YouTuber persisted, contacting Paul again by email on June 9, five months later, to discuss the Liquid Marketplace fraud and embezzlement rumors with Bahadori, but received no response.
Coffeezilla sent another message to Paul on June 26, including specific questions about Liquid Marketplace and a 24-hour deadline for a response.
However, Paul filed the CryptoZoo lawsuit on June 27, just three hours before Coffeezilla’s deadline expired. Given this timing, Coffeezilla suggested that the CryptoZoo lawsuit may have been filed to impede his investigation into Liquid Marketplace.
OSC Opens Probe on Liquid Marketplace
The Ontario Securities Commission (OSC) applied enforcement proceedings against Liquid Marketplace and three company executives Bhadori, Amin Nikdel, and Dennis Domazet on June 19.
The filing alleged that the Liquid Marketplace platform operated as a ‘multi-layered fraud.’ According to the OSC, the company raised $10 million from investors but misappropriated $3 million, including hidden payments to shell companies and the personal enrichment of the accused executives.
The regulatory body also alleged that Liquid Marketplace defrauded users of $2.7 million by falsely claiming that their tokens granted legal ownership of underlying assets. The platform purportedly stated that the collectibles were authenticated, appraised, and insured, which the OSC disputes.
On the Flipside
- The OSC has not accused Logan Paul of wrongdoing.
- The role of social media influencers in promoting financial products raises questions about accountability and the need for clearer disclosure standards in the digital age.
Why This Matters
The ongoing CryptoZoo saga highlights the complex interplay between celebrity endorsements, crypto investments, and regulatory oversight. As more details emerge, it reminds investors to be cautious, especially when high-profile figures promote financial products.
Learn more about Logan Paul’s defamation lawsuit against Coffeezilla.
This Is Why Logan Paul Is Suing Coffeezilla over CryptoZoo
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