In the fast-paced world of cryptocurrencies, a new name has emerged, capturing both attention and controversy. Ben.eth, a previously unknown figure in the crypto community, has risen to prominence with his recent token launches. However, these launches have not gone unnoticed by regulators and crypto lawyers, who suggest that Ben.eth may find himself in the crosshairs of United States authorities.
During the month of May, Ben.eth experienced an astonishing surge in popularity, with his Twitter following skyrocketing nearly five-fold. This newfound influence has been fueled by the launch of three memecoins: Ben Coin (BEN), PSYOP, and LOYAL. With each of these launches, Ben.eth required investors to send Ether directly to his wallet, accumulating a substantial sum. Presently, his wallet boasts an impressive 10,946 ETH, valued at $20.8 million.
While Ben.eth’s supporters stand by the legitimacy of these token sales, others raise concerns about potential regulatory repercussions and discontented investors. Michael Kanovitz, a partner at Loevy & Loevy, drew parallels between the PSYOP launch and previous actions taken against high-profile figures like Kim Kardashian and Paul Pierce by the Securities and Exchange Commission (SEC). In fact, Kanovitz went as far as to send a strongly-worded letter to Ben.eth, threatening a class-action lawsuit accusing him of using manipulative tactics during the PSYOP presale.
Kanovitz’s claims included allegations that Ben.eth promised investors substantial returns and engaged in misinformation campaigns and potential price manipulation through collaborations with other influencers. These accusations extend beyond PSYOP to include BEN and LOYAL, as Kanovitz continues to gather evidence to support his case.
Michael Bacina, a lawyer and partner at Piper Alderman, emphasized that the legal trouble Ben.eth could face hinges on the investigation launched by U.S. regulators. The SEC, in particular, might classify these tokens as investment contracts, just as it has done with most other cryptocurrencies, potentially considering them unregistered securities. If found guilty, Ben.eth could face significant fines and penalties.
Despite attempts to reach out to Ben.eth for comments, Cointelegraph has yet to receive a response. In the same vein, the SEC did not provide an immediate comment when contacted for a general statement.
In the midst of this controversy, Ben.eth recently launched LOYAL, a token supposedly tied to an upcoming decentralized exchange (DEX) and memecoin launchpad called PsyDex. Collaborator Ben Armstrong shed some light on this venture, positioning it as a rival to Uniswap.
Amidst all the chaos, other influencers have attempted to capitalize on the memecoin frenzy, soliciting ETH from their followers for virtually nothing in return. The wallet address “yougetnothing.eth” has garnered 411 ETH, equivalent to $780,000, with numerous transactions recorded in the past 13 hours, as reported by Etherscan.
It serves as a reminder that even notable figures like Kim Kardashian and Paul Pierce have faced penalties from the SEC for their involvement in crypto promotions. In October, Kardashian was slapped with a $1.26 million penalty for endorsing EthereumMax (EMAX), while Pierce reached a similar-sized settlement with the regulator in February.
As the story of Ben.eth unfolds, both the crypto community and regulatory bodies eagerly await further developments, uncertain of what the future holds for this enigmatic memecoin creator