Tech
Logan Paul Offers Partial Refund for Failed CryptoZoo Game
- By Joe Tidy and Imran Rahman-Jones
- IT Correspondent and Technology Reporter
January 5, 2024
Image source: Getty Images
Image Caption: Logan Paul made the move to boxing and WWE after making a name for himself in online videos
Logan Paul has started the process of buying back NFTs from fans who lost money in his failed cryptocurrency game.
The YouTube star announced the CryptoZoo game in 2021, but the project never materialized, despite fans spending millions of dollars on game tokens.
Paul, 28, said he will buy the NFTs back, provided that fans who accept don’t sue him.
It is unlikely that fans will be able to get all their money back.
CryptoZoo was intended to be a game where players could buy, sell, and breed virtual animals using cryptocurrency.
At the time, Paul encouraged people to buy cryptocurrency collectibles for what he called a “really fun game that makes you money.”
However, after selling millions of dollars in NFTs and cryptocurrencies, he stopped talking about CryptoZoo and seemingly abandoned the project.
After another YouTuber, Coffeezilla, posted a series of videos showing his investigation in the project in December 2022, Paul apologizedclaiming to want to “do the right thing.”
A year later, he announced the start of the buyback process, which he says will cost him $2.3 million (£1.8 million).
It will refund players 0.1 Ether, a cryptocurrency, for each NFT purchased.
The NFTs were originally sold in September 2021 for 0.1 Ether.
However, its monetary value has dropped by 37% since the launch of CryptoZoo NFTs, meaning fans will continue to suffer financial losses.
In a post on X, formerly Twitter, Paul said: “This buyback is a way for me to give back to those who intended to play CryptoZoo.
“The buyback is not intended to compensate those who gambled on the cryptocurrency market and lost.”
He added that it was “not intended as an investment vehicle.”
Image caption: CryptoZoo homepage, now removed
Users have until February 8, 2024 to accept the refund, provided they do not have any legal claims against Paul and others connected to CryptoZoo.
An investor who spent $40,000 on NFTs told the BBC last year that he was not interested in a refund and wanted Paul to complete the project to ensure the game and the much-hyped NFTs fulfilled their much-touted potential.
“I don’t think it will ever be as big as it could have been, but I think it’s important that the ‘founders’ keep the promises they made to investors,” the 35-year-old said.
Previously, Paul promoted the cryptocurrency Dink Doink in June 2021, which has since plummeted in value and is now worthless.
He later he told the New York Times who regretted promoting the coin without disclosing that he helped create it and had a financial stake in the cryptocurrency.
“I definitely didn’t act as responsibly as I should have,” he said.
The CryptoZoo case “highlights the risks associated with investing in a relatively new and unregulated market,” says lawyer Syedur Rahman, a partner at Rahman Ravelli, a firm specializing in cryptocurrency fraud cases.
While Mr. Rahman doesn’t believe the high-profile cases will have a major impact on cryptocurrencies’ overall reputation, he says they do spark “discussions about the need for further regulation.”
The level of regulation varies from country to country, but Mr. Rahman says consumers “may have some rights around purchasing NFTs or things of that nature.”
Whether they decide to litigate to get their initial outlay back depends on how much they invested in the first place, he says, since the costs and inconvenience of going to court could outweigh the amount they get back.