The CFTC has issued a subpoena to Hit Network, formerly associated with Ben Armstrong, as part of an investigation into potentially fraudulent crypto activities involving 15 tokens, including BEN.
Points
- The CFTC is investigating potential fraud involving 15 tokens, including BEN.
- Hit Network, associated with Ben Armstrong, received a subpoena for information.
- Armstrong’s former company is under scrutiny for its trading activities and digital wallets.
The Commodity Futures Trading Commission （CFTC） has issued a subpoena to Hit Network, the crypto-focused media company previously associated with Ben Armstrong, known as “BitBoy.” The subpoena, dated July 16, requests detailed information about trading activities and digital wallets connected with 15 tokens, including the memecoin BEN. This investigation aims to uncover potential fraudulent activities in the crypto space.
Background and Investigation
Armstrong, who was the public face of Hit Network, featured all the tokens mentioned in various videos, promoting their potential for significant price increases. The CFTC’s investigation seeks to determine if any fraudulent activities were associated with these promotions.
A Volatile Exit
Armstrong left Hit Network in August 2023 amidst allegations of substance abuse. After his departure, he was arrested for attempting to reclaim a disputed Lamborghini from a former business partner. Armstrong is currently in litigation against Hit Network over his exit and the vehicle.
In a statement, Armstrong claimed that his former colleagues took over financial control of the BitBoy Crypto brand in 2020 and made various accusations against them. He expressed satisfaction with the subpoena, believing it would validate his concerns.
Fraud Allegations and Token Activities
The videos mentioning the tokens, except for BEN, were made before March 2021. The investigation is focused on activities under the BitBoy Crypto branding during that period. Armstrong admitted to doing paid promotions of crypto scams but claimed it was accidental. One of the tokens listed in the
subpoena, BEN, was created by a pseudonymous influencer known as ben.eth. Armstrong joined the token’s core team shortly after its creation in May 2023, but parted ways with the project a month later, only to take over as CEO earlier this year.
Hit Network’s Position
According to sources close to Hit Network, Armstrong’s involvement with BEN was a significant factor leading to his exit. The company’s other executives were reportedly uncomfortable with integrating the token into their business operations.
Official Statements and Legal Proceedings
Hit Network declined to comment on the ongoing investigation. The CFTC has not responded to requests for comment either. Armstrong, however, remains vocal about the situation, claiming that many in the industry will face repercussions for their actions.
解説
- CFTC’s Role: The CFTC is tasked with regulating the derivatives markets, including futures and options. This investigation highlights the agency’s increasing focus on potential fraud within the cryptocurrency market.
- Impact on Crypto Media: The case against Armstrong and Hit Network underscores the potential risks associated with influencer-led promotions in the crypto industry. Investors should exercise caution and conduct thorough research before making investment decisions based on promotional content.
- Legal Ramifications: The outcome of this investigation could set precedents for how regulatory bodies handle similar cases in the future. It might lead to stricter regulations and more rigorous scrutiny of promotional activities in the crypto space.
- Investor Awareness: This situation serves as a reminder for investors to remain vigilant and skeptical of high-return promises, especially those promoted by influential figures without transparent backing.
In summary, the CFTC’s investigation into Hit Network and Ben Armstrong highlights the complexities and risks associated with influencer-driven promotions in the cryptocurrency market. Investors should stay informed and cautious, especially when dealing with new and unverified tokens.