Ben.eth, the pseudo-anonymous memecoin creator behind at the very least three controversial token launches in current weeks, might fall below the crosshair of United States regulators, crypto lawyers counsel.
A beforehand little-known persona within the crypto neighborhood, Ben.eth has seen his Twitter following blow up practically five-fold in May. The influencer has launched at the very least three memecoins in current weeks — Ben Coin (BEN), PSYOP, and LOYAL.
Pre-sales of those memecoins — which require Ether (ETH) to be despatched on to the creator himself — have allowed Ben.eth to assemble 1000’s of ETH. Currently, his pockets holds 10,946 ETH, equal to $20.8 million.
While Ben.eth’s supporters have defended the legitimacy of the token gross sales, others warn that the influencer’s actions might face the wrath of regulators and disgruntled traders alike.
Michael Kanovitz, a accomplice at Loevy & Loevy, advised Cointelegraph that the Psyop launch “is a classic example of the concerns the SEC [U.S. Securities and Exchange Commission] has identified in actions like those against Kim Kardashian and Paul Pierce.”
Kanovitz not too long ago despatched a profanity-laden letter by way of NFT to Ben.eth threatening a class-action swimsuit towards him, alleging that the influencer “used a manipulative launch strategy” within the PSYOP presale.
To @eth_ben and @psyopeth :My regulation agency, Loevy & Loevy, shall be submitting a category motion towards you in your IRL title if you don’t refund the entire $PSYOP presale purchasers instantly. Our settlement demand letter has served as an NFT to your ben.eth deal with, viewable right here:… pic.twitter.com/qaxhECDUhb
— Mike Kanovitz (@MikeKanovitz) May 19, 2023
Kanovitz alleged that Ben promised Psyop’s returns on funding could be “several fold or greater” and claimed he “coordinated with other influencers to spread misinformation” and probably manipulated the token’s worth.
Pointing to BEN and LOYAL, Kanovitz mentioned he’s “continuing to gather evidence” on the alleged scheme.
In feedback to Cointelegraph, Michael Bacina, a lawyer and accomplice at Piper Alderman, mentioned that the legal bother Ben might discover himself in is determined by if the gross sales are investigated and what U.S. regulator carries out that investigation.
The Securities and Exchange Commission, for instance, may consider the tokens are funding contracts — because it does with most different cryptocurrencies — and will take into account them unregistered securities, which might see Ben face doable fines and penalties.
Cointelegraph has contacted Ben.eth on a number of events however has not acquired a response. Cointelegraph contacted the SEC for normal remark however didn’t obtain a direct response.
Related: Memecoins: From memes to multibillion-dollar pumps, scams and rug pulls
Ben.eth’s most up-to-date token launch, LOYAL, is supposedly for an in-development decentralized change (DEX) and “memecoin launchpad” named PsyDex that shall be a competitor to Uniswap, in accordance with collaborator Ben Armstrong.
Last minute tweaks to the $LOYAL contract, in order that it may be used to correctly incentivize liquidity on Psydex. Shouldn’t be too lengthy. Thank you on your persistence.
— ben.eth (@eth_ben) May 31, 2023
Meanwhile, different influencers have tried to seize a number of the current memecoin magic, asking followers to ship ETH for primarily “nothing.”
Send ETH right here:
— PAULY (@Pauly0x) May 30, 2023
The pockets deal with “yougetnothing.eth” at the moment exhibits a stability of 411 ETH price $780,000 and has near 4,000 transactions over the past 13 hours, in accordance with Etherscan.
Other influencers, comparable to American socialite Kim Kardashian, have been slapped by the SEC for crypto promotions. In October, the regulator fined Kardashian $1.26 million for her involvement within the promotion of EthereumMax (EMAX). In February, NBA participant Paul Pierce made a similar-sized settlement with the regulator.
Additional reporting by Jesse Coghlan.
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