The JENNER memecoin appreciated more than 90% this Thursday (14), even with a securities lawsuit being filed against Caitlyn Jenner.
Victims accuse the Olympic medalist of deceiving investors in the token offering.
Caitlyn Jenner fraud allegations spark interest in memecoin
Two international investors, Naeem Azad of the United Kingdom and Mihai Caluseru of Romania, have filed a lawsuit in federal court in California. They allege combined losses of more than $50,000. Some of the allegations include Jenner using her celebrity status to lure unsuspecting investors into the project without full transparency or registration.
Launched on the Solana and Ethereum blockchains, the JENNER cryptocurrency aimed to capitalize on Caitlyn’s fame and leverage the growing celebrity memecoin trend. The token debuted on Solana’s meme cryptocurrency launchpad, Pump.Fun.
According to court documents, the asset saw its trading volume skyrocket to over $250 million in its first few days, attracting approximately 20,000 investors globally. However, the lawsuit claims that this initial success was short-lived. It notes that after hitting record highs, the altcoin lost 99% of its peak value as insider trading and project mismanagement came to light.
Plaintiffs argue that Jenner, her manager Sophia Hutchins, and alleged crypto advisor Sahil Arora violated securities laws.
These are tokens without proper registration or transparency, the document says.
Arora, a figure allegedly linked to previous financial frauds, reportedly dumped a substantial portion of his holdings following the token’s initial surge. This triggered a sell-off that led to the token’s collapse.
In response, the project relaunched on Ethereum, which the lawsuit claims further harmed holders of the original Solana-based token.
The allegations of the process
The lawsuit highlights several allegations of misrepresentation, including unfulfilled promises to list the asset on major exchanges. Others include unkept commitments for token buybacks and a 3% transaction tax added without informing investors.
Additionally, Jenner reportedly promised to donate a portion of the project's proceeds to Donald Trump's 2024 presidential campaign. That promise was also reportedly broken.
By failing to disclose details such as insider holdings, purchase prices for initial acquisitions, and associated financial risks, the plaintiffs claim that Jenner misled investors about the viability of the memecoin as an investment.
Despite this report, data on DexScreener shows that JENNER has gained 90% since the opening of trading on Thursday. It currently trades at $0.0007250.
JENNER Price Performance. Source: DexScreener
A trend of crypto controversies among celebrities
The law firm representing Azad and Caluseru, Fitzgerald Monroe Flynn PC, notes that the JENNER case reflects an ongoing pattern of cryptocurrency promotions by celebrities that end badly.
The case is part of a growing trend where celebrities use their public image to launch meme cryptocurrencies, but when the projects collapse, investors are left with the financial consequences, said attorney Peter Grazul, who represents the plaintiffs.
According to Grazul, cases like these highlight the need for stricter regulatory oversight to protect investors.
Jenner’s launch gained traction as the celebrity actively promoted the coin on social media, emphasizing its novelty and potential as a celebrity-backed meme cryptocurrency. However, according to the lawsuit, Jenner gradually distanced herself from the project.
Insider allegations have even surfaced suggesting that his initial gains from the valuation could constitute insider trading. On-chain sleuths have begun investigating transaction records, alleging that Jenner and his team may have benefited from premeditated price manipulation.
Plaintiffs argue that the project’s apparent abandonment signals a disregard for investors’ financial losses. Meanwhile, celebrity involvement in cryptocurrencies has become a double-edged sword. Public figures are increasingly lending credibility to projects, but they often raise red flags about ethical conduct and transparency.
JENNER is not Caitlyn’s only foray into the crypto industry. She also launched the MEDAL token, inspired by her 1976 Olympic gold medal. While the asset is not mentioned in the current lawsuit, its association with Caitlyn and the JENNER controversy could influence investor confidence in the project. This could draw regulatory attention to her other crypto initiatives.
The article Celebrity-Related Memecoin Soars 90% After Lawsuit appeared first on BeInCrypto.
