A class action alleges the creators of the "Let's Go Brandon" token and several other individuals have misleadingly promoted the crypto asset to artificially inflate its value before selling their portions for personal gain.
The “Let’s Go Brandon” (LGB) token is the subject of a proposed class action lawsuit that alleges the creators of the “meme coin” and several others have misleadingly promoted the cryptocurrency asset in order to artificially inflate its value before selling their portions for personal gain.
The 77-page lawsuit over the alleged “pump-and-dump” scheme claims that the creators of the LGB token and their company, LGBcoin.io, enlisted NASCAR, Brandonbilt Motorsports, driver Brandon Brown and conservative figures such as Candace Owens and David J. Harris, Jr., among others, to misleadingly endorse the meme coin over social media while disguising their control over substantial amounts of the asset that were available for public trading.
The complaint alleges that investors who bought the politically charged tokens between November 4, 2021 and March 15, 2022, in particular when it was believed NASCAR would approve the LGB token’s sponsorship of Brown, were injured financially given they did so at artificially inflated prices.
“Defendants’ strategy was a success,” the suit reads. “The misleading promotions and celebrity endorsements were able to artificially increase the interest in and price of the LGB Tokens during the Relevant Period, causing investors to purchase these losing investments at inflated prices.”
According to the lawsuit, a “meme coin” is a term used to describe a digital asset that has no actual use and does not give owners of the coin any governance rights over the associated cryptocurrency project. A meme coin’s value is instead attributed to its ability to “go viral” on social media, which in turn increases interest in and attracts buyers to the asset, the case says. Largely, meme coin prices and trading volume depend on “community sentiment” and celebrity tweets, the suit says, and the assets are “generally marketed toward naïve investors” with little understanding of the risks associated with “highly speculative, unregulated investments” such as cryptocurrencies, according to the case.
The name of the “Let’s Go Brandon” token stems from a political phrase used by many as a coded way to express displeasure with President Joe Biden, the lawsuit relays. According to the complaint, the phrase was sparked from amisunderstandingthat occurred between Brown and NBC Sports reporter Kelli Stavast after the driver won a NASCAR Xfinity Series race at the Talladega Speedway in October 2021.
The case says that within weeks of Brown’s Talladega win, 330 trillion LGB tokens were minted by LGBcoin.io. According to the suit, the company’s co-founders, which include conservative commentor Jeffrey Carter, Erik Norden, Alex Mascioli and James Koutoulas, created the asset purportedly to “inspir[e] positivity and patriotism” and to support America and “the American dream.” To “entice” potential investors, the suit says, LGBcoin.io and its execs repeatedly touted the token’s connections to Brown and NASCAR, among several other supposed national sponsorships and partnerships, and “bragged” that the company had donated hundreds of thousands of LGB tokens to conservative causes.
Between December 30, 2021 and January 4, 2022, the token’s value sank by 63 percent after NASCAR executives announced that they had “changed [their] minds” about allowing the coin’s creators to sponsor Brown, the lawsuit relays. The suit summarizes that the LGB token bubble, in which its price rose more than 500 percent, burst almost immediately after NASCAR distanced itself from its prior approval of the sponsorship.
The case alleges NASCAR has been complicit in LGBcoin.io’s and the promoters’ actions given its failure to take any meaningful steps to distance itself from the initially agreed-upon sponsorship.
Per the filing, the LGB token had a trading value of $0 by January 28, 2022. To date, the price of the LGB token “still has not recovered and trading volume remains down significantly.”
According to the lawsuit, the reality of the LGB token is that its creators’ entire business model hinges on political marketing and promotional activities, often from “celebrities” and political pundits, to trick regular investors into believing that the asset will make them wealthy “while at the same time supposedly supporting American values.”
The lawsuit looks to represent all individuals who, between November 4, 2021 and March 15, 2022, bought “Let’s Go Brandon” tokens and were subsequently damaged.
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