FaZe Clan CEO Resigns Following MLG Memecoin Collapse and Rug Pull Allegations

Richard “Banks” Bengtson, CEO of FaZe Clan, has stepped down following allegations tied to the collapse of the MLG memecoin, a project that saw rapid hype followed by a sharp decline. Bengtson denied any wrongdoing, attributing the backlash to the vulnerability of the FaZe brand, and announced his indefinite departure from both the organization and the public internet sphere. The move comes amid growing scrutiny over influencer-driven cryptocurrency ventures and the risks of “rug pulls,” where promoters allegedly exploit followers for profit.

The controversy erupted in early 2025 after Bengtson and other FaZe members endorsed the MLG memecoin, which initially surged in value due to aggressive influencer marketing. However, the token’s collapse led to accusations of a coordinated exit strategy that left investors with losses. A leaked group chat intensified the fallout, revealing Bengtson’s public blame of influencer Adin Ross for the crash. Ross confirmed the authenticity of the messages but denied responsibility, calling the situation “sad asf” and rejecting any role in the token’s failure. The exchange escalated community backlash, contributing to Bengtson’s decision to step away from his leadership role.

FaZe Clan has not issued an official statement on Bengtson’s resignation, leaving stakeholders and fans in the dark about the organization’s future. The absence of a clear leadership strategy raises questions about the stability of a company long associated with high-profile partnerships and social media-driven growth. Analysts note that this incident highlights the fragility of projects reliant on influencer endorsements, particularly in the volatile crypto market. The episode also underscores the challenges of maintaining accountability in a space where rapid hype cycles often outpace regulatory oversight.

The broader crypto community is reacting to the event with heightened caution. Recent trends show an uptick in sophisticated scams, including deepfake frauds targeting Ripple users, further eroding trust in digital asset projects. This case serves as a cautionary tale for both creators and investors, emphasizing the need for transparency in marketing and the risks of conflating entertainment personas with financial credibility. While the MLG memecoin’s collapse may not be directly comparable to larger market failures, its rapid rise and fall reflect systemic vulnerabilities in influencer-led fundraising.

Bengtson’s resignation leaves a leadership vacuum at FaZe Clan, an organization that has thrived on internet culture and esports. The company’s next steps—whether restructuring its executive team or pivoting away from crypto ventures—will be critical in restoring its reputation. Meanwhile, the incident adds to an ongoing debate about the ethical responsibilities of influencers in the crypto space. As regulatory frameworks struggle to keep pace with innovation, high-profile failures like the MLG memecoin underscore the need for clearer guidelines and more rigorous due diligence.

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