NFT Collector Became Memecoin Creator Nett’s $7M in Sketchy Presale
Fearless speculators have given more than $7 million in ETH to Ben.eth, a pseudonymous memecoin creator that has rapidly risen to prominence in the past two weeks.
Following the success of the BEN token, which peaked at a market cap of $72 million four days after its launch on May 6, Ben.eth announced a pre-sale for his next memecoin PSYOP on May 12, asking investors to send ETH to his wallet to secure an award.
Ethereum users have since sent 3,843 ETH to Ben.eth despite the risk of PSYOP’s founder choosing to walk away with the funds. Ben.eth already has exposed tokens launch several times.
The speculative fervor surrounding memecoins has some pundits wondering if a renewed crypto bull season could be just around the corner. Early PEPE investors recently made fortunes after the token, which offers little utility beyond an homage to a cartoon frog, rocketed to a market cap of $1.8 billion in early May.
But other analysts warn that greedy investors could fall victim to their own FOMO, as underhanded developers can use tokens as Trojan horses to perform rig moves, exploits or distribute other malicious code.
Ben. eth
Ben.eth was active on Twitter as an NFT collector before quickly rising to memecoin celebrity status after launch BEN May 6. The token was linked to the ‘Ben DAO’ Telegram group, which described itself as a collective of crypto traders named Ben.
The token took off after Ben Armstrong, the controversial crypto influencer, started advance token to his 1M followers two days later, sparking a 500% rise in the price of BEN over 24 hours.
Armstrong later took over the project following an undisclosed agreement between the pair. Recent Tweets suggest Ben.eth agreed to transfer its BEN liquidity provider tokens to Armstrong.
Developer sounds alarm
On Friday, Vydamo, a former FTX and Ethereum engineer, published screenshots purporting to show that Ben.eth may not have the community’s best interests at heart.
The images suggest that the smart contract includes a feature that allows PSYOP to be transferred from any whitelisted wallet holding the token to another wallet. The contract also imposes varying fees on PSYOP sales depending on what other NFTs are held in the wallet, with Milady holders reportedly facing a 30% fee on sales – 10 times higher than other collections.
“I have never worked with anyone more unprofessional or confused and because of this I left the team before payment,” Vydamo said. “I have credible evidence that Ben does not intend for this to be a fair launch or even project.”
Vydamo claims they decided they weren’t comfortable contributing to the project and walked away from $1 million worth of PSYOP tokens to blow the whistle on the project. Ben.eth shared Vydamo’s thread and dismissed the claims as FUD.
However, not all of Vydamo’s posts paint a damning picture of PSYOP.
On May 17, Vydamo posted an analysis of PSYOP’s pre-sale distribution that he conducted in collaboration with Ctlarp or TRM Labs, a blockchain intelligence firm.
Concluding that the token’s distribution “looks pretty standard” for a token sale, Vydamo concluded that the allocations look “very similar” to PEPE’s.
The researcher noted that the account values of many of PSYOP’s biggest contributors have increased a lot in the past month, which concludes that many “paid-in” memecoin investors are betting on the token.
He also identified high levels of engagement with Ben.eth’s posts from major NFT communities. Borovik.eth, an NFT aggregator, has also compiled data shows notable pre-sale contributions from NFT communities.
