In a stunning turn of events, Richard “Banks” Bengtson, CEO of FaZe Clan, has resigned following the dramatic collapse of the MLG memecoin and allegations of a rug pull. This scandal has sent shockwaves through both the cryptocurrency and esports communities, raising serious questions about influencer-driven crypto projects.
What Happened with the MLG Memecoin?
The controversy began when Bengtson and other FaZe Clan members aggressively promoted the MLG memecoin in early 2025. The token saw rapid initial growth due to influencer marketing, but then collapsed spectacularly, leading to accusations of a coordinated exit strategy that left investors with significant losses.
- Initial hype driven by FaZe Clan’s massive social media following
- Sharp price increase followed by sudden collapse
- Investors left holding worthless tokens
The Leaked Chat That Sealed Bengtson’s Fate
The situation escalated when a private group chat was leaked, showing Bengtson publicly blaming influencer Adin Ross for the memecoin’s failure. Ross denied responsibility, calling the situation “sad asf” and distancing himself from the project’s collapse.
Why This Rug Pull Allegation Matters
This incident highlights several critical issues in the cryptocurrency space:
| Issue | Impact |
|---|---|
| Influencer accountability | Eroding trust in celebrity endorsements |
| Regulatory gaps | Lack of oversight for influencer-led projects |
| Investor protection | Vulnerability of retail investors to hype |
FaZe Clan’s Uncertain Future
With Bengtson’s abrupt departure, FaZe Clan faces significant challenges:
- Leadership vacuum at a critical time
- Damage to brand reputation
- Potential loss of partnerships
Lessons from the MLG Memecoin Collapse
This incident serves as a cautionary tale for both investors and influencers in the crypto space. It underscores the need for:
- Greater transparency in influencer marketing
- Improved due diligence from investors
- Stronger regulatory frameworks
The fallout from the MLG memecoin collapse and Bengtson’s resignation will likely have lasting implications for influencer-driven cryptocurrency projects. As the dust settles, both the crypto and esports industries must grapple with difficult questions about accountability, transparency, and the ethical responsibilities of public figures in financial promotions.
Frequently Asked Questions
What is a rug pull in cryptocurrency?
A rug pull occurs when developers or promoters abandon a project and take investors’ funds, often after artificially inflating the token’s value through marketing.
Was the MLG memecoin officially associated with FaZe Clan?
While not an official FaZe Clan project, it was heavily promoted by FaZe members including CEO Richard Bengtson, lending it credibility.
What are the legal implications of a rug pull?
Depending on jurisdiction, rug pulls may constitute fraud or securities violations, though enforcement remains challenging in the decentralized crypto space.
How can investors protect themselves from similar scams?
Investors should research projects thoroughly, be wary of hype-driven investments, and understand that influencer endorsements don’t guarantee legitimacy.
What’s next for FaZe Clan after this scandal?
The organization will need to rebuild trust, potentially restructure leadership, and may distance itself from cryptocurrency ventures in the short term.
