It appears that US SEC found another crypto-related area that can be targeted.
The United States Securities and Exchange Commission (SEC) is setting its sights on cryptocurrency influencers who have engaged in promoting dubious crypto projects and manipulating token prices on social media platforms.
John Reed Stark, former SEC chief, has sent a stark warning to these individuals via Twitter, cautioning them to brace for legal consequences.
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Stark didn't mince words when he addressed the issue of crypto influencers leveraging their social media platforms to bolster questionable crypto projects and manipulate market prices, especially during bullish trends.
The ex-SEC chief emphasized that anti-fraud rules uniformly apply to all forms of price manipulation, including penny stock securities, exchange-listed securities, and crypto securities, hinting that the days of unchecked activity by these influencers may be counted.
He drew attention to the audacious manner in which these social media influencers deceive their followers.
Stark pointed out the nature of securities fraud, which makes it easier to spot and prosecute than other fraud types, given that perpetrators often blatantly display their actions.
Regulators and law enforcement need only turn on their computers to discover an extraordinary and resplendent evidentiary trail of compelling and vivid inculpatory evidence. Indeed, far from tying the government’s hands, social media has become the virtual rope that many crypto bros (and sisters) use to hang themselves.
According to Stark, the common platforms for such manipulative practices include Twitter, Discord, Instagram, and Reddit.
Numerous cryptocurrency influencers violate securities laws. One such high-profile case is of Kim Kardashian, who was slapped with a $1.26 million fine for endorsing a scam project.
Bitboy Crypto, a popular influencer notorious for promoting shady projects, also faced public backlash and was named in a whopping $1 billion lawsuit for promoting unregistered securities. Additionally, in November 2022, the SEC issued a series of subpoenas to influencers for promoting tokens such as Hex (HEX), Pulsechain (PLS), and PulseX (PLSX).