Benjamin Pasternak, the founder of the SocialFi and token launchpad application Believe, has been arrested on charges including strangulation in the second degree and assault. Public records from the New York Criminal Court confirm the arrest, which is reportedly linked to an incident on March 31.
Pasternak, 26, faces one count of strangulation in the second degree and two counts of assault in the third degree, with the latter alleging intent to cause physical injury. He has entered a plea of not guilty to these charges. A court appearance is scheduled for June 11. The details of the arrest were initially reported by the Australian Financial Review, which cited a friend of Pasternak’s, public relations executive Dini von Mueffling.
Key Takeaways
- Benjamin Pasternak, founder of the Believe app, has been arrested on serious assault and strangulation charges.
- Pasternak has pleaded not guilty and is awaiting a court date on June 11.
- The arrest occurs amidst a class-action lawsuit accusing Pasternak and his companies of orchestrating a “rug pull” through deceptive token practices.
- Investors allege a forced token migration led to significant financial losses, with the platform’s native token experiencing a near-total value collapse.
- The legal troubles highlight the increasing scrutiny on crypto projects regarding investor protection and potential fraudulent activities.
Believe is a platform built on the Solana blockchain, designed to facilitate the trading of tokens associated with creators and influencers. It also offers a mechanism for users to launch new cryptocurrencies by interacting with Believe’s official account on the X platform.
Class-action lawsuit and alleged fraudulent activity
The platform has recently faced significant controversy, with users and investors leveling accusations of a “rug pull” against Pasternak and his team. A class-action lawsuit filed on March 23 alleges that Pasternak’s business practices and those of his associated companies led to substantial investor losses, reportedly in the hundreds of millions of dollars.
Central to the lawsuit is the claim of a forced migration from the platform’s original token, Launchcoin, to a new token named Believe. This migration, allegedly executed in October of the previous year, is said to have resulted in the creation of 333 million new tokens for individuals considered insiders, thereby diluting the holdings of existing investors by approximately one-third. Tokens belonging to investors who did not participate in this migration were reportedly rendered valueless.
The lawsuit further alleges that Pasternak became unresponsive and disappeared following this forced migration, failing to provide any communication or updates to affected investors. The complaint articulates a pattern of behavior, stating, “Pasternak ran the same play three times, under three different token names: generate excitement, bring consumers in, collect fees, and let the token collapse. Each time, he and his entities profited on every transaction, including the sell-offs that wiped out consumers.”
Market data from Coingecko indicates a severe devaluation of the platform’s native token. Since reaching its peak in May 2025, the token has reportedly lost 99.7% of its value, trading at approximately $0.0007009. It experienced a further 24% decline in the 24 hours preceding the report.
It remains unclear whether Pasternak’s recent arrest is directly connected to the ongoing civil litigation. Representatives from Believe have been contacted for comment regarding these developments.
Regulatory Precedent and the Future of SocialFi Compliance
The legal actions against Benjamin Pasternak, encompassing both criminal charges and a significant civil lawsuit alleging fraudulent token practices, could establish a crucial precedent for the rapidly evolving SocialFi sector. As platforms integrating social media functionalities with tokenized economies gain traction, the regulatory landscape struggles to keep pace. This case underscores the potential legal ramifications for founders and companies operating in this space, particularly concerning allegations of market manipulation and investor deception.
Globally, regulatory bodies are increasingly focusing on consumer protection within the digital asset markets. Frameworks such as the Markets in Crypto-Assets (MiCA) regulation in the European Union aim to provide a comprehensive legal structure for crypto-asset service providers and token issuers. While the specific legal actions against Pasternak fall under existing criminal and civil statutes, the outcome could influence how future regulations are drafted and enforced for decentralized or semi-decentralized platforms. The SEC in the United States has been particularly active in pursuing enforcement actions against crypto projects it deems unregistered securities offerings or fraudulent schemes. The allegations of a “rug pull” and deceptive token migration directly align with the types of activities that regulatory agencies are keen to prosecute. The failure to provide clear communication and the alleged intentional dilution of investor assets present clear legal challenges that could serve as a cautionary tale for other SocialFi projects. The stakes are high, as successful prosecution could lead to stricter compliance requirements for token launches, increased due diligence mandates for investors, and a more robust enforcement posture from financial regulators worldwide.
Source: : www.theblock.co