The United States Securities and Exchange Commission (SEC) is investigating social media influencers in the cryptocurrency industry who have advocated fraudulent schemes and are found to have manipulated the pricing of particular tokens. The SEC is investigating whether or not these people changed the prices of the tokens they promoted. Former Securities and Exchange Commission (SEC) chief John Reed Stark issued a warning to crypto influencers on Twitter to prepare for lawsuits.
During the height of the bitcoin boom, Stark tweeted about cryptocurrency influencers pushing dodgy companies and helping others manipulate cryptocurrency prices. Since anti-fraud rules apply to any form of price manipulation, including the prices of publicly traded securities, equity securities and crypto securities, he warned that the time available for crypto influencers to social media is limited.
A former head of the Securities and Exchange Commission has drawn attention to the fact that many social media influencers deceive their followers by projecting an air of superiority and swagger. There is a significant increase in shilling and price manipulation on social media platforms including Twitter, Discord, Instagram and Reddit. Stark made the observation that unlike other types of fraud, like identity theft, where the perpetrator may try to hide behind their name, securities fraud is much easier to discover and in court because of the very nature of the crime.
Stark cited notorious crypto influencer Francis Sabo as an example. Sabo was accused of exploiting social media to manipulate publicly traded stocks worth $100 million. Stark used Sabo as an example. Sabo is just one of many crypto influencers who have breached securities regulations, and this violation was recently discovered. The best-known example is the $1.26 million fine that Kim Kardashian was forced to pay for promoting a bogus business.
Another notable influencer under investigation by law enforcement authorities, Bitboy Crypto, has recently come under fire for allegations that it promotes fraudulent activities. On March 31, a lawsuit was filed against a YouTuber for advertising unregistered titles and seeking $1 billion in damages. In November 2022, the SEC issued subpoenas to a number of cryptocurrency industry influencers who had pushed cryptocurrencies such as Hex (HEX), Pulsechain (PLS), and PulseX (PLXX). ).