- June 3, 2023
- Posted by: [email protected]
- Category:
The United States Securities and Exchange Commission (SEC) has intensified its crackdown on crypto influencers, imposing fines and issuing cease-and-desist orders in recent years. These actions are targeted at individuals who have endorsed fraudulent projects and manipulated token prices through social media channels. Former SEC chief, John Reed Stark, took to Twitter to caution crypto influencers, warning them to prepare for prosecution.
Stark’s tweet highlighted the activities of social media crypto influencers who promoted questionable crypto projects and engaged in market manipulation during bullish periods. He emphasized that anti-fraud regulations apply to any form of price manipulation, whether it involves exchange-listed securities, penny stocks, or crypto securities. According to Stark, the days of social media crypto influencers are numbered, as regulators and law enforcement agencies are committed to combating fraudulent practices.
Stark drew attention to the audacious and arrogant behavior displayed by many social media influencers who deceive their victims. Social media platforms such as Twitter, Discord, Instagram, and Reddit serve as common avenues for shilling and price manipulation. Unlike other forms of fraud, where perpetrators often attempt to conceal their identities, securities fraud leaves a clear and traceable evidentiary trail, making it easier to detect and prosecute.
The former SEC chief highlighted the case of Francis Sabo, a notorious crypto influencer charged in a $100 million securities fraud case, who exploited social media platforms to manipulate the prices of exchange-traded stocks. Numerous instances of crypto influencers violating securities laws have come to light, including the well-known case of Kim Kardashian, who was fined $1.26 million for promoting a fraudulent project.
Another prominent influencer, Bitboy Crypto, has faced legal consequences for endorsing questionable projects. The YouTuber was named in a $1 billion lawsuit on March 31 for promoting unregistered securities. Additionally, in November 2022, the SEC issued multiple subpoenas to influencers for promoting Hex (HEX), Pulsechain (PLS), and PulseX (PLSX) tokens.
These actions by the SEC underscore its commitment to maintaining integrity and transparency in the crypto industry. Crypto influencers are being held accountable for their actions, as regulators leverage the extensive evidentiary trail left by social media platforms to build cases against those engaged in fraudulent practices.
