NFT Influencer Faces Legal Threat Over Alleged $7 Million Token Pre-sale Fraud – CryptoMode
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In a developing story, a high-profile non-fungible token (NFT) influencer faces a legal predicament over accusations of employing a deceptive launch approach concerning liquidity pools and the gradual dissemination of tokens.
The Alleged Fraud Of An NFT Influencer
A notable NFT influencer, identified by his pseudonym Ben.eth, has reportedly been hit with a settlement demand for what is described as, at the very least, wire fraud concerning a recent token pre-sale amounting to $7 million. The allegations were uniquely served to the influencer as an NFT, featuring abrasive language throughout the document.
On May 20th, Mike Kanovitz, a partner at the established law firm Loevy & Loevy, announced via Twitter that a settlement demand letter had been issued as an NFT to the wallet address linked to Ben.eth. However, the identity of the influencer beyond his pseudonym remains a mystery.
Kanovitz accused Ben.eth of adopting a deceptive launch strategy for the Psyop (PSYOP) token, amassing $7 million in the initial pre-sale period spanning 72 hours. The primary concerns pertain to the structure of the liquidity pools (LP) and the subsequent gradual release, or “trickling out,” of tokens post-pre-sale.
The Aftermath
Shortly after the letter’s publication on Twitter, the NFT influencer tweeted that 50% of the tokens had already been dispatched, and the remainder would follow promptly. He faced allegations of being culpable of wire fraud as a baseline offense, implying potential implications for racketeering. This accusation also hinted at a potential treble damages award against him, which could escalate the demand from $7 million to $21 million.
In his statement, Kanovitz proposed that refunding would be the most honorable action. He also cautioned Ben.eth of potential legal consequences if the refunds were not initiated. The attorney warned that if Ben.eth continues his actions, his law firm would intervene to address the alleged injustice.
Potential Legal Action
Kanovitz further threatened to pursue a lawsuit that would name Ben.eth personally, in addition to his alias, and would be served at his residence. He also mentioned the possibility of subpoenaing the influencer’s communications, which, he warned, could serve as incriminating evidence.
The attorney ended his letter with a stern warning, emphasizing the serious nature of the influencer’s actions and the potential harm they could cause. In addition, he stressed the repercussions if corrective action was not taken promptly.
After receiving the letter, the NFT influencer retweeted it later the same day, deeming it as “unprofessional” and suggesting it could potentially lead to disciplinary action from the bar association.
This ongoing saga serves as a stark reminder of the legal implications and consequences that can arise within the rapidly evolving landscape of NFTs. As more details emerge, how this case will unfold and impact the broader cryptocurrency community remains to be seen.
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