In the wild world of cryptocurrency, there’s often a fine line between hype and fraud, and the story of Insane Labz and its LABZ token is a case study in how easily that line can be crossed. The Arkansas-based nutritional supplements company, known in MMA circles and among Barstool Sports fans, ventured into the digital currency space earlier this year, launching its own token, LABZ, with bold promises and even bolder claims. But what unfolded was a mix of deception, misplaced trust, and a rush of investor enthusiasm that ultimately ended in a near-total collapse.
The LABZ token was launched in May, backed by a slick marketing campaign that promised collaborations with “vetted celebrities.” Investors were led to believe that big names in the world of mixed martial arts and social media would be jumping on board to endorse the token. Among these celebrities were UFC President Dana White, MMA legend Nate Diaz, and the social media sensation Hasbulla Magomedovich Magomedov. For a brief moment, it seemed as though Insane Labz had hit on a winning formula, but the reality was far from the glossy image portrayed in their promotions.
What actually happened behind the scenes was less about legitimate celebrity endorsements and more about a group of internet trolls having a laugh—and getting paid for it. Rather than securing genuine collaborations, Insane Labz allegedly paid these trolls to impersonate the aforementioned celebrities in the company’s Telegram group, where they hyped up the LABZ token to unwitting investors. The trolls, playing their roles with mischievous glee, succeeded in creating a buzz that saw the token’s market cap skyrocket from $3 million to a peak of $15 million. But the deception couldn’t last, and when the truth began to emerge, the token’s value plummeted by more than 90%, leaving many investors with significant losses.
The rise and fall of the LABZ token is a cautionary tale for anyone dabbling in the volatile world of cryptocurrency. One investor, who wished to remain anonymous, described how he was drawn in by the promise of big names backing the token. “I thought it was gonna be huge,” he said, explaining how he was convinced by the supposed involvement of Dana White and the prospect of the token being advertised during UFC events. In total, he lost over $475, a sum that he described as “a lot” for him. Despite multiple attempts, Insane Labz did not respond to requests for comment on the situation.
Blockchain data reviewed by Decrypt, along with analysis from chain analysis firm Bubblemaps, revealed that a crypto wallet linked to the Insane Labz team paid the trolls a small sum—$155 in Solana each—for their efforts. “We just did it for a laugh that got a bit out of hand,” one of the impersonators admitted. The first fake celebrity account to appear in the Insane Labz Telegram chat was “TheOfficialHasbulla,” which purported to belong to Hasbulla Magomedov, an influencer from Dagestan with millions of followers on Instagram. The real Hasbulla does not speak English, so the fake account communicated using Russian Google Translate and GIFs. Despite the obvious red flags, some users in the chat were convinced, and the Insane Labz team did little to dispel the illusion. Instead, they played along, with one moderator coyly suggesting, “Maybe he’s real,” and teasing, “I know something you don’t know yet.”
The result was a rapid surge in the token’s value, with the price jumping 115% over 12 hours. During this period, wallets linked to the company took advantage of the situation, selling approximately $12,450 worth of LABZ tokens while also buying more. Just three days later, as the token’s price remained elevated, an unidentified whale offloaded over $70,000 worth of LABZ, profiting around $68,000 after buying in on the day of the token’s launch.
As the impersonation scheme gained traction, more trolls joined in. A fake Dana White and a phony Nate Diaz entered the scene, further fueling the frenzy. The fake Hasbulla was a frequent participant in similar scams, the Diaz impersonator revealed, and the success of the Hasbulla account in the Insane Labz chat encouraged them to change their handles and continue the ruse. “Then when we saw the [Insane Labz] reaction to Hasbulla being in the chat, we thought we would change our handles and join for the lols,” he explained.
The real Hasbulla’s business manager, Justin Ozuna, who has secured the influencer a long-term promotional contract with the UFC, confirmed that Hasbulla had no knowledge of Insane Labz or its token. “I highly assume this is the case with Dana and Nate as well,” Ozuna said, distancing the real celebrities from the scam.
Despite the blatantly false claims, the Insane Labz team not only encouraged the impersonators but actively leaned into the deception. According to another investor in the LABZ token, the company created custom emojis featuring the supposed celebrities’ faces and would hype the chat whenever the fakes posted messages. The investor also claimed that Dustin Lebleu, the CEO of Insane Labz, pretended to have a FaceTime chat with the real Dana White regarding the project. A screenshot of this supposed chat was shared in the Telegram group, but many now believe the image was doctored to lend credibility to the scam.
The fake Dana White continued to play his part, even promising to give away four tickets to an upcoming UFC event in the Insane Labz Telegram group on May 28. The company promoted the giveaway on Twitter, leading to another surge in the LABZ token’s value. This was the point at which the trolls claim the Insane Labz team reached out to them, offering to pay them in Solana to keep the charade going. The payment arrangement was eventually agreed upon, with the impersonators receiving 1 Solana each, paid weekly.
Bubblemaps, the data analysis firm that investigated the transactions, found a direct link between one of the payment wallets used to compensate the trolls and the wallet that originally created the LABZ token. The lead investigator, Thomas Perrin, noted that the suspicious nature of the payments, which were routed through multiple wallets, raised red flags. “Why not use a marketing tagged wallet?” he questioned, suggesting that the attempt to obscure the source of the funds indicated a deliberate effort to conceal the team’s involvement in the scam.
As the dust settles on the collapse of the LABZ token, the story serves as a stark reminder of the risks inherent in the cryptocurrency market. What began as a seemingly legitimate project backed by a well-known company quickly descended into farce, with investors left holding the bag. The ease with which the trolls were able to fool investors—and the apparent complicity of the Insane Labz team—highlights the need for greater scrutiny and due diligence in the fast-paced world of digital currencies.
