The United States Securities and Exchange Commission (SEC) is pursuing crypto influencers who promote scam projects and are found to be manipulating the prices of certain tokens through social media. Former SEC chief John Reed Stark took to Twitter to warn crypto influencers that they are ready to face prosecution.
Attention to all crypto promoters who use social media to manipulate the price of crypto-securities: Fail at your peril. Not only will you eventually get caught, but your prosecution will be like shooting fish in a barrel.
If the exchange rate is manipulated… pic.twitter.com/AfKROIlR0N
– John Reed Stark (@JohnReedStark) May 30, 2023
In his tweet, Stark called out the crypto social media influencers who hindered many crypto projects and often helped them manipulate market prices during the bull run. He warned that for any form of price manipulation – whether it is the price of exchange-listed securities, penny stock securities or crypto securities – the same anti-fraud rules apply, and the days of social media crypto influencers are counted.
The former head of the SEC drew attention to the senseless and arrogant way in which many social media influencers torture their victims. Most shilling and price manipulation takes place through social media platforms such as Twitter, Discord, Instagram or Reddit. Stark noted that the nature of securities fraud makes it easier to identify and prosecute, unlike other forms of fraud where the perpetrator often tries to hide their identity.
“Regulators and law enforcement need only turn on their computers to find a unique and glaring trail of compelling and clear inculpatory evidence. Indeed, far from binding the hands of the government, social media has become a virtual rope that many crypto bros (and bros) use to hang themselves. Stark explained.
Stark cited the example of the famous crypto influencer Francis Sabo, who was accused in a $ 100 million case of securities fraud and used social media platforms to manipulate stocks traded on the exchange.
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Aside from Sabo, there have been many instances of crypto influencers being found in violation of securities law. The most famous case is Kim Kardashian, who was fined $1.26 million for promoting a scam project.
Another major influencer to face the law is Bitboy Crypto an influencer who faced a lot of public anger for promoting shady projects. The YouTuber has been named in a $1 billion lawsuit for promoting unregistered securities. Earlier in November 2022, the SEC also issued a subpoena to several influencers for promoting HEX, Pulsechain and PulseX tokens.
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