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- 1 Ben.eth may come under scrutiny from American authorities.
- 2 A settlement demand letter has been sent as an NFT to Ben.
According to lawyer Michael Kanovitz, who is threatening a class action lawsuit against Ben.eth, the PSYOP technique resembles past instances where the SEC took enforcement action.
Ben.eth Launches three memecoins
Ben.eth, a pseudo-anonymous founder of memecoins that has launched at least three contentious tokens in recent weeks, may come under scrutiny from American authorities, according to cryptocurrency attorneys.
Ben.eth, a relatively obscure figure in the cryptosphere, has seen his Twitter following explode by over five times in May. Ben Coin (BEN), PSYOP, and LOYAL are three memecoins that the influencer has just released.
Ben.eth has amassed thousands of ETH from pre-sales of these memecoins, which demand that Ether be given to the author directly. His wallet now holds 10,946 ETH, or $20.8 million.
While Ben.eth’s fans have defended the validity of the token sales, others have expressed concern that the influencer’s activities may incur the wrath of authorities and irate investors.
The Psyop launch, according to Michael Kanovitz, a partner at Loevy & Loevy, “is an iconic instance of the concerns the SEC [U.S. Securities and Exchange Commission] has noticed in cases such as those against Kim Kardashian and Paul Pierce.”
Allegations made by Kanovitz on Ben.eth
According to a tweet made by Mike Kanovitz on May 20, a settlement demand letter has been sent as an NFT to the wallet address connected with the influencer known as Ben.eth, whose true name is still unknown.
Ben.eth allegedly “used a manipulative launch strategy” for the Psyop (PSYOP) token, which generated $7 million in its inaugural presale over a period of 72 hours, according to his allegations.
Ben allegedly made a “several fold or greater” investment return guarantee to Psyop, according to Kanovitz, who also said that Ben “coordinated with other influencers to spread misinformation” and perhaps fixed the price of the token.
Kanovitz stated he is “continuing to gather evidence” on the alleged plot and pointed to BEN and LOYAL. The issues centered around the design of the liquidity pools (LP) and how the tokens “trickled out” after the presale.
Shortly after the letter went live on Twitter, Ben.eth stated that 50% of the tokens had been distributed and that “the rest will be sent in short order.”
Ben.eth Might Face Legal Implications
Whether Ben.eth will face legal scrutiny depends on if the sales are investigated and whether U.S. authority conducts that inquiry, according to Michael Bacina, a lawyer and partner at Piper Alderman.
As it does with the majority of other cryptocurrencies, the Securities and Exchange Commission, may view the tokens as investment contracts and deem them unregistered securities, which might subject Ben.eth to fines and penalties.
According to contributor Ben Armstrong, Ben.eth’s most recent token launch, LOYAL, is allegedly for an under-construction “memecoin launchpad” and decentralized exchange (DEX) dubbed PsyDex that will compete with Uniswap.
Other influencers, meantime, have made an effort to duplicate the recent memecoin magic by asking their followers to give ETH for virtually “nothing.”
According to Etherscan, the wallet address “yougetnothing.eth” has seen almost 4,000 transactions in the last 13 hours and presently has a balance of 411 ETH worth $780,000.
Other influencers, like American socialite Kim Kardashian, have received a warning from the SEC for their marketing of cryptocurrencies. For her role in the marketing of EthereumMax (EMAX), Kardashian was given a $1.26 million punishment by the regulatory body in October. Paul Pierce, an NBA player, reached a similar deal with the regulator in February.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
