Ben.eth, the pseudo-anonymous memecoin creator behind at least three controversial token launches in recent weeks may fall under the crosshairs of United States regulators, crypto lawyers have suggested.
A previously little-known personality in the crypto community, Ben.eth saw his Twitter following explode nearly fivefold in May. The influencer has launched at least three memecoins in recent weeks – Ben Coin (BEN), PSYOP, and LOYAL.
The pre-sales of these memecoins – which require Ether (ETH) to be sent directly to the creator himself – allowed Ben.eth to accumulate thousands of ETH. Currently, his wallet has 10,946 ETH, equivalent to $20.8 million.
While Ben.eth’s supporters have DEFENDS the legitimacy of the token sale, some warn that influencer actions may face the wrath of regulators and unhappy investors.
Michael Kanovitz, a partner at Loevy & Loevy told Cointelegraph, the launch of Psyop “is a classic example of the concerns that the SEC is aware of in actions like those against Kim Kardashian and Paul Pierce.”
Kanovitz recently sent a defamatory letter via NFT to Ben.eth threatening a class-action suit against him alleging that he “used a manipulative launch strategy” in the PSYOP presale .
on @eth_ben and @psyopeth :
My law firm, Loevy & Loevy, will file a class action against you in your IRL name if you don’t refund everything $PSYOP presale buyers immediately.
Our settlement demand letter serves as an NFT to your ben.eth address, found here:… pic.twitter.com/qaxhECDUhb
— Mike Kanovitz (@MikeKanovitz) May 19, 2023
Kanovitz alleged that Ben promised Psyop’s return on investment would be “multiple times or more” and claimed that he “coordinated with other influencers to spread false information” and may have manipulated the price of tokens.
Pointing to BEN and LOYAL, Kanovitz said he was “continuing to gather evidence” of the alleged plot.
In comments to Cointelegraph, Michael Bacina, a lawyer and partner at Piper Alderman said that the legal trouble Ben will find himself in depends on whether the sale is investigated and what the US regulator does with that. investigation.
For example, the Securities and Exchange Commission (SEC), may believe that the tokens are investment contracts – like most other cryptocurrencies – and may consider them unregistered securities which could see Ben face the possible fines and penalties.
Cointelegraph contacted Ben.eth several times but did not receive a response. Cointelegraph contacted the SEC for general comment but did not immediately receive a response.
Related: Memecoins: From memes to multibillion-dollar bombs, scams and rug pulls
Ben.eth LOYAL’s latest token launch is supposedly for an in-development decentralized exchange (DEX) and “memecoin launchpad” named PsyDex, an alleged Uniswap competitor, according to collaborator Ben Armstrong.
Last minute tweaks to $LOYAL contract, so that it can be used to properly stimulate the liquidity of Psydex. Shouldn’t be too long. Thank you for your patience.
— ben.eth (@eth_ben) May 31, 2023
Meanwhile, other influencers tried to capture some of the new memecoin magic, ASK followers to send ETH for essentially “nothing.”
Send ETH here:
— PAULY (@Pauly0x) May 30, 2023
The wallet address “yougetnothing.eth” currently shows a balance of 411 ETH worth $780,000 and has had close to 4,000 transactions in the last 13 hours, according to Etherscan.
Some influencers, like American socialite Kim Kardashian, have been slapped by the SEC for crypto promotions. In October, the regulator issued Kardashian a $1.26 million penalty for his involvement in the promotion of EthereumMax (EMAX). In February, NBA player Paul Pierce made a similar size settlement with the regulator.
Additional reporting by Jesse Coghlan.
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