Influencers are an important aspect in the marketing of many products and/or services today. Social media celebrities are also regularly used to promote crypto. Recently you could read in the crypto news that more than one in three influencers on TikTok posts misleading videos about cryptocurrencies. This is a big problem as young people often take advice from their favorite influencers and do little to no research before investing in certain projects.
Former chief of the American Securities and Exchange CommissionJohn Reed Stark, has now through a tweet issued a warning to all crypto influencers who have promoted so-called scam projects and are found to be manipulating the prices of certain coins through social media.
Crypto influencers are being prosecuted
We saw it happen in October last year: Kim Kardashian received an indictment from the US regulator at the time for involvement in promoting Ethereum (MAX (EMAX): an ordinary pump & dump.
Some American celebrities such as Jake Paul and Lindsey Lohan also received hefty fines from the SEC a while ago for promoting TRX and BTT tokens without disclosing the payments received.
Stark warned that the same anti-fraud rules apply to any kind of price manipulation — whether it be the price of exchange-traded securities, penny stock securities or crypto securities — and that the days of crypto influencers on social media are numbered.
Stark uses the term “crypto securities” in his tweet, which is currently a hot topic in the crypto community. The lawsuit between the financial watchdog and Ripple, which will determine whether XRP can be classified as a security, will therefore be an important moment for the industry as a whole.
Fraud easy to detect
The former SEC chief also drew attention to the brazen and arrogant manner in which many social media influencers defraud their victims. Stark noted that the nature of the fraud makes it easy to detect and prosecute, unlike other types of fraud where the perpetrator often tries to hide behind his/her identity.
