Celebrity meme coin JENNER surged over 90% on Thursday, even as a securities lawsuit was filed against Caitlyn Jenner.
Victims accuse the Olympic gold medalist of misleading investors in the token’s offering.
Fraud Allegations Against Caitlyn Jenner Spurs Interest in JENNER
Two international investors, Naeem Azad from the UK and Mihai Caluseru from Romania, initiated legal action in a federal California court. They claim combined losses of more than $50,000. Part of the allegations include Jenner using her celebrity status to attract unwary investors to the cryptocurrency project without full transparency or registration.
Launched on the Solana and Ethereum blockchains, JENNER aimed to capitalize on Caitlyn’s fame and leverage the growing trend of celebrity meme coins. The token debuted on Solana’s meme coin launchpad, Pump.Fun.
According to court documents, JENNER saw trading volume soar to over $250 million in its early days, attracting approximately 20,000 investors globally. However, the lawsuit claims this early success was short-lived. It notes that after reaching record highs, JENNER lost 99% of its peak value as alleged insider trading and project mismanagement surfaced.
The plaintiffs argue that Jenner, her manager Sophia Hutchins, and alleged crypto advisor Sahil Arora violated securities laws.
“They are tokens without proper registration or transparency,” the document reads.
Arora, a figure reportedly linked to prior financial scams, allegedly dumped a substantial portion of his holdings after the token’s initial surge. This triggered a sell-off that led to the token’s collapse.
In response, the project was relaunched on Ethereum. This, according to the lawsuit, further harmed holders of the original Solana-based token.
The lawsuit highlights various alleged misrepresentations, including unfulfilled promises to list JENNER on major exchanges. Others include unkept commitments for token buybacks and a 3% transaction tax added without informing investors.
Additionally, Jenner reportedly pledged to donate a portion of the project’s revenue to Donald Trump’s 2024 presidential campaign. This promise is also said to have gone unfulfilled.
By failing to disclose details such as insider holdings, purchase prices for early acquisitions, and associated financial risks, the plaintiffs claim that Jenner misled investors about the viability of JENNER as an investment.
Despite this report, data on DexScreener shows that the JENNER meme coin has been up 90% since Thursday’s session opened. As of this writing, it is trading for $0.0007250.
A Broader Trend of Celebrity Crypto Controversies
The law firm representing Azad and Caluseru, Fitzgerald Monroe Flynn PC, notes that the JENNER case reflects an ongoing pattern of celebrity cryptocurrency promotions gone awry.
“This case is part of a growing trend where celebrities leverage their public image to launch meme coins, but when the projects collapse, investors are left with the financial consequences.” said Attorney Peter Grazul, who is representing the plaintiffs.
According to Grazul, cases like these highlight the need for tighter regulatory scrutiny to protect investors.
The launch of JENNER gained traction as Jenner actively promoted the coin on social media. She emphasized its novelty and potential as a celebrity-backed meme coin. However, according to the lawsuit, Jenner gradually distanced herself from the project.
Insider allegations even surfaced, suggesting that her early gains from JENNER’s price surge could constitute insider trading. On-chain sleuths began digging into transaction records, alleging that Jenner and her team may have benefited from premeditated price manipulation.
The plaintiffs argue that Jenner’s apparent abandonment of the project signals a disregard for investors’ financial losses.
Meanwhile, celebrity involvement in cryptocurrency has become a double-edged sword. Public figures are progressively lending credibility to projects but often raise red flags about ethical conduct and transparency.
JENNER is not Caitlyn’s only venture in the crypto space. She also launched the MEDAL token, drawing inspiration from her 1976 Olympic gold medal.
While MEDAL is not named in the current lawsuit, its association with Caitlyn and the JENNER controversy could influence investor confidence in the project. This could attract regulatory attention to her other crypto initiatives.
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