FaZe Banks Accused in MLG Crypto Scam Controversy

2025-07-29

In 2025, the line between entertainment, influence, and finance blurred even further when FaZe Banks, a towering figure in the esports world and co-founder of FaZe Clan, found himself at the center of a crypto controversy that shook the internet.

What started as yet another meme coin launched a familiar trend in the digital asset space spiraled into a public scandal involving multi-million dollar losses, leaked messages, and accusations of market manipulation.

This article explores the timeline of events, the accusations, and what it all means for the future of influencer-led crypto projects, investor trust, and FaZe Clan itself.

Who Is FaZe Banks?

FaZe Banks, born Richard Bengtson, is a prominent American influencer, entrepreneur, and co-founder of FaZe Clan, one of the most recognizable esports and lifestyle brands globally.

Over the years, Banks has grown into a cultural icon in gaming and online entertainment, known for his business savvy, vlogs, and association with other high-profile creators.

FaZe Banks Accused in MLG Crypto Scam Controversy .png

However, in July 2025, Banks became the center of a firestorm of controversy after being accused of participating in a cryptocurrency scam involving a meme token known as MLG Coin.

The backlash was swift, and Banks officially stepped down from his role as CEO of FaZe Clan.

What Is the MLG Meme Coin?

The MLG coin was a meme cryptocurrency project that emerged in early 2025, with promotional backing from notable influencers including FaZe Banks and streamer Adin Ross.

Initially, the project gained significant traction across social media platforms, rapidly growing from a market cap of $3 million to nearly $200 million in just days.

Investors, many of them fans of the influencers flocked to buy in, spurred by live endorsements and viral hype. But the coin’s value collapsed almost as quickly as it rose, leaving countless holders with devastating losses.

The Pump and Dump Allegations

The abrupt crash of MLG coin led to allegations of a “pump and dump” scheme, a type of scam where a group artificially inflates a token’s value and then quickly sells off their holdings causing the price to crash while early promoters profit.

Leaked Telegram group chat messages, reportedly from July 28, 2025, appeared to show FaZe Banks blaming Adin Ross for the collapse, suggesting Ross and his audience were used as “exit liquidity” a term used when unsuspecting investors are left holding the bag while insiders cash out.

Ross later confirmed the authenticity of the messages but denied any wrongdoing, insisting he had also lost money live on stream and was unaware of any manipulative intent behind the scenes.

The "LA Vape Cabal" and Stream Manipulation Accusations

Complicating matters further, a group dubbed the “LA Vape Cabal” allegedly consisting of FaZe Banks and others was accused of coordinating behind the scenes to orchestrate the MLG launch.

During a key live stream, Adin Ross reportedly bought a large amount of MLG tokens, hyping the coin’s value.

However, within minutes, another member of the group allegedly dumped a large number of tokens on the market. This triggered a rapid sell-off, wiping out investor confidence and reportedly costing Ross around $12,000 in real time.

Critics argue that this was a classic case of engineered exit liquidity, using a high-profile influencer as a promotional pawn while insiders profited.

FaZe Banks Responds: Denial and Mental Health Toll

In response to the growing accusations, FaZe Banks issued a series of public statements asserting his innocence. He emphasized that:

He never sold his tokens.
He never orchestrated a scam.
He believes his “FaZe” name is being exploited and manipulated online.

“I’ve never scammed anyone in my life,” Banks wrote in a now-deleted social media post. “This has become a coordinated attempt to destroy me.”

Banks also claimed he was the target of a paid smear campaign, alleging that individuals were compensated between $40,000 to $50,000 to spread negative narratives about him on platforms like Twitter/X, Reddit, and YouTube.

Ultimately, Banks announced he was stepping down as CEO of FaZe Clan and taking a break from public life due to stress, reputational damage, and emotional exhaustion.

A Pattern of Crypto Controversy for FaZe Clan

This isn’t FaZe Clan’s first entanglement with questionable crypto schemes. In 2021, several members were involved in the infamous “SaveTheKids” token scandal, which similarly involved heavy influencer promotion followed by a token crash.

As a result, some members were suspended or permanently removed from the organization.

The recurrence of such events has damaged FaZe Clan’s reputation, raising broader concerns about:

Lack of accountability among influencer-driven crypto projects
Exploitation of fan communities for financial gain
The urgent need for regulation in the creator-crypto economy

With FaZe Banks now removed from leadership, the organization's future credibility in the crypto and gaming sectors may hang in the balance.

The Fallout and What’s Next

As of now:

FaZe Banks is offline, having stepped back from FaZe Clan and social platforms.
Adin Ross continues to stream, denying any intent to scam and maintaining that he too was a victim.
No official legal action has been taken, but investigations may still be underway behind the scenes.
FaZe Clan has not yet released a comprehensive statement addressing the crypto scandal in full.

This story remains fluid and unresolved, but its impact is clear: the intersection of influence and finance, especially in crypto, is increasingly dangerous, and fans are demanding transparency, ethics, and protection.

Conclusion

The FaZe Banks–MLG coin controversy serves as a stark reminder of the risks involved in influencer-led cryptocurrency promotions. While meme coins and viral tokens continue to capture public imagination, the lack of transparency, regulation, and ethical oversight can quickly turn hype into harm.

Whether or not FaZe Banks personally profited, the damage is real: reputations ruined, investors burned, and trust eroded. It also highlights the urgent need for greater due diligence from investors, responsible behavior from creators, and clearer regulatory guidelines for digital asset promotions.

For FaZe Clan, this marks yet another chapter in an ongoing battle with brand credibility. For the crypto space, it’s a lesson in how not to build trust in Web3.

FAQ

What is FaZe Banks’ real name?

FaZe Banks’ real name is Richard Bengtson. He is a co-founder and former CEO of FaZe Clan.

What is the MLG crypto coin?

MLG coin is a meme cryptocurrency promoted by influencers including FaZe Banks and Adin Ross. It rose rapidly in value before crashing, leading to rug pull allegations.

Did FaZe Banks scam people with MLG coin?

FaZe Banks denies all wrongdoing, stating he never sold tokens or intended to deceive anyone. However, leaked messages and coordinated activities have raised concerns about a pump-and-dump scheme.

What was Adin Ross’ role in the scandal?

Adin Ross was reportedly manipulated into buying the coin live on stream, which may have encouraged fans to invest. He denies involvement in any scam and claims he also lost money.

What is the “LA Vape Cabal”?

This term refers to a group of influencers allegedly coordinating behind the scenes to profit from the MLG coin launch, possibly at the expense of unaware investors like Adin Ross and his followers.

Why did FaZe Banks resign?

FaZe Banks stepped down as CEO of FaZe Clan due to the intense backlash, mental health strain, and reputational harm following the MLG crypto scandal.

Is this FaZe Clan’s first crypto scandal?

No. FaZe Clan was previously involved in the “SaveTheKids” token scam in 2021, which also featured influencer promotion and subsequent investor losses.

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