Loevy & Loevy's partner claims that Ben.eth could be forced to pay damages of $21 million.
A prominent figure in the non-fungible token (NFT) space, known by his pseudonym Ben.eth, recently found himself on the receiving end of a settlement demand. However, this wasn't your typical legal notice - it was delivered as an NFT.
Mike Kanovitz, a partner at the Loevy & Loevy law firm, accused Ben.eth of conducting wire fraud through a controversial token presale that raised $7 million.
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Kanovitz alleged that the NFT influencer utilized a "manipulative launch strategy" for the Psyop (PSYOP) token. This strategy allegedly involved suspicious structuring of liquidity pools (LP) and a deceptive release of cryptocurrency after the presale.
Kanovitz didn't mince words in his demand letter, cautioning Ben.eth that he could be found guilty of wire fraud. In the letter, the man addressed Ben.eth by stating:
At a minimum, you would be guilty of wire fraud, which is a predicate act for racketeering and the basis for a treble damages award against you ($7 million becomes $21 million).
If Kanovitz's threats are anything to go by, Ben.eth could find himself named in a lawsuit, served at his home, and have his personal communications subpoenaed. Kanovitz’s tweet made the gravity of the situation clear, noting:
So, just send back the ETH. The matter will be over, and you and your victims can all go on with their lives. But if you insist on f*cking over thousands of people, my law firm will step up to right that injustice.
Ben.eth appeared undeterred by the demand, announcing on Twitter that 50% of the tokens had been distributed, with the remaining planned to be released soon.
Despite the severity of the allegations, Ben.eth dismissed the letter as unprofessional, retweeting it and hinting at potential repercussions for Kanovitz with the bar association.
Only time will tell how this dramatic NFT spat plays out, but it's clear that the world of non-fungible tokens isn't just about digital art and celebrities – it has its fair share of legal tussles too.