Yesterday, the Twitter account of Ben.eth, the pseudonymous crypto influencer who collaborated with another crypto celebrity, Ben Armstrong aka Bitboy Crypto, to promote memecoins, was flooded with complaints from LOYAL investors. A delayed launch of a new memecoin LOYAL by Ben.eth was meant to incentivize early investors with a presale token airdrop but did not go smoothly.
"We are so LOYAL that we still have zero in our wallets," Twitter user MindDistrurbia tweeted. "When do we get the presale token please?" EJosepy wrote to Ben.eth, as did many other LOYAL investors.
Some crypto users did not rush with accusations for the token issuer and suspected the reason why they were unable to get their tokens was the problem with their wallets. "Anyone on Coinbase wallet having an issue receiving tokens? I don’t have mine yet," Patrick Salmons wrote.
When, after hours of waiting, some users finally managed to receive their LOYAL tokens, there was another disappointment because the amount of money they got was significantly lower than the invested funds.
"Yo Ben, I like you and own all your tokens, but I put $500 into LOYAL and only got airdropped $160 worth," Twitter user Worldweedseeds wrote on Twitter, whereas ZchuHand reported receiving $200 after investing $800. Another LOYAL investor, Captain Crypto, stated that the return on investment was only 26%.
Meanwhile, the Twitter account Ben.eth Official Support offered assistance to investors who encountered problems during the token airdrop.
The problems cryptocurrency investors have experienced with the launch of other Ben.eth's memecoins, including $PSYOP, caught the attention of Mike Kanovitz, founding partner of civil rights law firm Loevy & Loevy.
On May 19, Kanovitz shared the settlement demand letter to Ben.eth with his Twitter followers. "To Ben.eth and Psyopeth: My law firm, Loevy & Loevy, will be filing a class action against you in your IRL name if you do not refund all of the PSYOP presale purchasers immediately," the lawyer's letter reads.
"A refund is the stand-up thing to do. You have made promises and failed to live up to them. Anyone who has ever been in business knows that if you f*ck up on delivering what you promised, the customer gets a refund," Kanovitz wrote in his letter.
The lawyer emphasized that "there is every reason for a jury to find that you intentionally misled the buyers, having made and reneged on serial promises and used a manipulative launch strategy with the way you structured the LP pools and trickled out tokens," adding that the memecoin issuer "at a minimum, would be guilty of wire fraud, which is a predictable act for racketeering and the basis for a treble damages award ($7 million becomes $21 million)."
Kanovitz promised Ben.eth to file suit in the United States District Court for the District of Arizona, while the suit will name not only Ben.eth, but also his alias. "You are engaging in real fraud, and it is hurting real people. There will be consequences if you do not make it right."
Interestingly, BitBoy Crypto, a popular crypto blogger, is likely one of the co-conspirators mentioned by Kanovitz in his letter. Not only has Armstrong been accused by Twitter users of promoting crypto fraud schemes, but there is already an ongoing lawsuit against the blogger for allegedly promoting the collapsed crypto exchange FTX.
BitBoy Crypto helped Ben.eth with the promotion of BEN, the first memecoin issued by the crypto influencer now threatened by Kanovitz. With previous tokens, including PSYOP, Ben.eth raised over $9 million, while after the presale of LOYAL the total raised exceeded $21 million.
This immense increase in the value of the wallet belonging to Ben.eth, who directly receives money from memecoin investors, happened in less than a month. On May 3, there was only $2,600 worth of cryptocurrency compared to the millions of dollars it has now.
The anger of Kanovitz and the cryptocurrency investors he represents is well-founded, as the first tokens, which included BEN, were pumped and dumped, while Ben.eth promised not to keep the supply of LOYAL unlike it was in the case of previous memecoins.
"Third time is a charm. Memorial Day weekend. If you were not a believer before, now is your chance to become one. Send to Ben.eth or 0x91364516D3CAD16E1666261dbdbb39c881Dbe9eE for 33% of the absolute total supply. I will not hold the supply of this token heavy like the others," Ben.eth tweeted on May 27.
Meanwhile, on May 30, Armstrong announced new plans for BEN, LOYAL, and PSYOP tokens, including the airdrop schedule. "25% of LP profits on LOYAL will get airdropped each week to BEN coin holders. 25% of LP profits on LOYAL will go to fund our crypto adoption initiatives with BEN Coin (from ETH side )," BitBoy promised memecoin investors.
Hopefully, Twitter user Donanator, who explained the utility of Ben.eth’s memecoins as "assisting the influencers in taking your money," will not prove right this time.