Prominent blockchain investigator ZachXBT has yet again accused four popular crypto traders of a pump-and-dump scheme. At the center of the controversy are – TraderNJ, PetaByte, XO, and Trader SZ – who allegedly profited from the gains at the expense of their followers.
There are many telltale signs of a pump-and-dump scheme. The crypto industry, for one, is swarmed with influencers who continuously “take shady promotion deals without any level of transparency, hurting both projects and their followers.”
However, in an industry where a new product or strategy launches every minute, it can be very difficult to tell the difference between what’s legitimate.
ZachXBT has gained a notable reputation for fearlessly uncovering fraudulent projects and scams within the cryptocurrency industry. His first exposé spotlights on Trader NJ and PetaByte, who are speculated to have purportedly engaged in deceptive practices with several crypto projects.
They are said to have utilized the identities of influential individuals to obtain free tokens from projects such as CBOT and BabyShib, subsequently offloading them onto their unsuspecting followers.
Numerous Telegram text and audio messages provide evidence that Trader NJ had requested a substantial portion of the CBOT token supply for promotional purposes alongside PetaByte. Telegram messages provided by the BabyShib team from the BabyShib team affirm discussions where Peta and NJ negotiated marketing efforts in exchange for 3.5% of the token supply.
Shortly after shilling these tokens and generating hype, they allegedly started selling them for more than $115,000 in just a few days, despite the project’s relatively low market capitalization. This behavior contradicted their prior assertion of having “no intentions of selling anything anytime soon.”
Even though Trader NJ insisted that he “doesn’t engage in paid promotion and never has,” text messages from Telegram and the receipt of BABYSHIB tokens as compensation tell a different story. The BabyShib team asserted that Peta failed to fulfill the initial agreement by not involving other influencers and promptly liquidating the tokens upon receiving them.
The second part of the exposé highlighted the involvement of Trader SZ and Trader XO in a pump-and-dump scheme resembling the previous one. But this time, the token at the helm of the investigation is the Ethereum-based PAAL AI token.
Initially, this duo distanced themselves from the CBOT controversy and even issued public statements, placing the blame squarely on PetaByte and NJ. However, it was later discovered that both Trader SZ and Trader XO were actively engaged in another promotional effort, this time for PAAL.
The investigator uncovered that PetaByte and NJ had linked their wallet addresses from their involvement with CBOT and BABYSHIB shills to PAAL, making it easily traceable. In short, Trader SZ and Trader XO began aggressively promoting PAAL on Twitter alongside NJ and PetaByte, and this collaboration was corroborated by the official PAAL Twitter account.
Trader SZ received 4four million PAAL tokens from their team on August 10 and began shilling a few days before finally dumping. In total, ZachXBT found that the trader dumped all of his tokens for more than $130k. Trader NJ, on the other hand, said that his “PAAL conviction has not changed,” but his wallet had already dumped all of his PAAL for over $120k.