By
Steve Muchoki
April 26th, 2024
Some of the popular NBA players like Grayson Allen have enrolled on Friend.tech driving the popularity of the platform higher.
Within two weeks of its launch, Friend.tech has created a massive buzz in the crypto space amassing more than 100,000 addresses since its launch on August 10. Friend.tech is a decentralized social platform that allows users to buy or sell the shares of personal accounts on X, previously Twitter.
As a result, the total number of Friend.tech crypto wallet addresses connected to X accounts is rapidly increasing. This increase in accounts appears to align with the substantial earnings of the platform since its launch on August 10, amassing over $25 million in fees as reported by DefiLlama.
Also, data from Dune Analytics confirms the presence of at least 80,000 distinct users, with an additional 15,000 users registered since Sunday. The virality of the social dApp Friend.tech has also attracted several individuals from non-cryptocurrency spheres, particularly in the realm of X, to become part of Friend.tech.
Notably, Richard “FaZe Banks” Bengtson II, a co-founder of the prominent esports community FaZe Clan, became a member on Sunday. This quickly led to a rapid increase in the value of his shares, making them some of the most expensive.
Similarly, shares associated with NBA player Grayson Allen also experienced a notable surge in value shortly after his enrollment. These shares offer holders specific privileges, including the capability to send private messages to sellers.
Friend.tech has garnered appreciation within the cryptocurrency community due to its user-friendly UX and UI. While currently exclusively available on mobile devices, Friend.tech provides users with the unique advantage of direct messaging the celebrities they are placing bets on. This feature stands out, especially as platforms like Elon Musk‘s X have limited private messaging for most users.
Friend.tech and SEC Scrutiny
Amid its rapid growth and strong virality, several market analysts have expressed concerns with the platform selling “shares” of accounts, that could be deemed as securities. Mark Hiraide, a partner at Mitchell Silberberg & Knupp said that there’s certainly an expectation of profit while trading shares on Friend Tech. Speaking to Blockworks, he added:
“Clearly there’s some utility there, but the fact that they call these ‘shares’ is an indication that these are not just admission tickets. What they are selling essentially is the prospect of capital appreciation in the shares; as more people join the platform, as more people buy shares to access popular personalities, the value of the shares will increase.”
Hiraide emphasized the importance of monitoring whether the shares will eventually trade on a platform other than Friend.tech. He pointed out that listing on external exchanges could complicate the differentiation between these assets and conventional securities.
According to Hiraide, the evident popularity of Friend.tech and the significant attention it has garnered might prompt the involvement of the SEC. “I think the same thing is true with the case against Ripple,” he said. “Even though the SEC knew that Ripple had a lot of resources and was going to be able to lawyer up, there was so much publicity surrounding Ripple that the SEC had no choice but to pursue it.”
