Ben.eth, the pseudo-anonymous memecoin developer behind at least three controversial projects in recent weeks, could fall under the radar of US regulators, supporters’ crypto suggests.
An early celebrity in the crypto community, Ben.eth saw his Twitter account hacked nearly five times in May. The influencer has launched at least three memecoins in recent weeks – Ben Coin (BEN), PSYOP and LOYAL.
Presales of these memecoins – which require Ether ETH ($1,868) was sent directly to the creator himself – helping Ben.eth collect thousands of ETH. Currently, his wallet has 10,946 ETH, or $20.8 million.
Although supporters of Ben.eth defended the legitimacy of the token sale, others warned that the act of influence could face the wrath of angry regulators and investors. Michael Kanovitz, a partner at Loevy & Loevy, told Cointelegraph that the release of Psyop “is a well-known example of the SEC [U.S. Securities and Exchange Commission] identifying actions such as those against Kim Kardashian and Paul Pierce.
Kanovitz recently sent a defamation letter from the NFT to Ben.eth threatening a class action lawsuit against him, accusing the activist of “using a blackmail system” in the PSYOP presale.
Kanovitz alleged that Ben promised that Psyop’s return would be “more or less” and said that he “coordinated with others to spread misinformation” and could control the price of tokens. Referring to BEN and LOYAL, Kanovitz said he “continues to gather evidence” on the alleged plan.
In a Cointelegraph speech, Michael Bacina, a lawyer and partner at Piper Alderman, said that Ben may find himself in legal trouble depending on whether the market is investigated and which US regulator conducts the investigation. For example, the Securities and Exchange Commission, may believe that tokens are financial contracts – as in many other cryptocurrencies – and may consider them unregistered securities, which may reveal Ben has legal power and punishment.
Cointelegraph contacted Ben.eth several times but did not receive any response. Cointelegraph contacted the SEC for general comment but did not immediately receive a response.
Ben.eth’s latest token launch, LOYAL, is believed to be for an exchange (DEX) and “memecoin launchpad” named PsyDex that will be a competitor to Uniswap, according to contributor Ben Armstrong. Meanwhile, third parties have tried to capture some of the recent memecoin magic, asking subscribers to send ETH for “nothing”.
The wallet address “yougetnothing.eth” has a balance of 411 ETH worth $780,000 and had almost 4,000 transactions in the last 13 hours, according to Etherscan.
Other activists, such as American socialite Kim Kardashian, have been known by the SEC for crypto promotion. In October, the regulator fined Kardashian $1.26 million for involvement in promoting EthereumMax (EMAX). In February, NBA player Paul Pierce reached an equity deal with the manager.
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