Former SEC Chief Warns Crypto Influencers Regarding Future Actions
- Former SEC chief John Reed Stark has warned cryptocurrency influencers to be prepared for legal action.
- Stark called out social media influencers who supported several fraudulent crypto projects during the bull run.
- Influencers involved directly or indirectly in the price manipulation of such tokens will face action from the regulator.
- The former SEC chief highlighted that the nature of securities fraud makes it easier to identify and prosecute.
The United States Securities and Exchange Commission (SEC) is going after cryptocurrency influencers who have advocated digital asset scam projects and have been investigated for influencing the prices of several tokens on social media platforms. Former SEC chief John Reed Stark has recently taken the matter to Twitter to warn cryptocurrency influencers to be prepared for legal action.
On Wednesday, Stark, who is known for his strong response to cyber breaches and digital regulatory compliance, called out social media influencers who supported several fraudulent crypto projects and directly or indirectly influenced the market prices of such tokens during the bull run.
He stated that any type of price manipulation — be it the price of exchange-listed securities, microcap-securities, penny stock securities, or crypto-securities — results in serious criminal offense. He added:
“What amazes me most about crypto promoters in particular is the brazen and arrogant way so many of them grift their victims—always in plain view. Be it on Twitter, Discord, Instagram, Reddit, etc., fraud is always easy to find, easy to archive, and easy to present to a judge or jury.”
In contrast to other types of fraud, where the culprit typically attempts to hide themselves behind their identity, the former SEC Chief highlighted that the nature of securities fraud makes it easier to identify and prosecute.
“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,” Stark stated.
It is interesting to note that Stark referenced the case of well-known cryptocurrency influencer Francis Sabo, who was recently charged in a $100 million securities fraud scheme and accused of manipulating exchange-traded stocks on social media.
In addition to Sabo, many other crypto influencers have been uncovered to have broken the law regarding securities. A notable influencer that has drawn criticism from the public for promoting dubious projects is Bitboy Crypto. The YouTuber faced a $1 billion lawsuit for endorsing unregistered securities on March 31. The SEC issued numerous lawsuits against influencers in November 2022 for marketing the Hex (HEX), Pulsechain (PLS), and PulseX (PLSX) tokens.
As reported earlier by BitcoinWisdom, the largest crypto exchange in the United States, Coinbase, might soon face legal action from the US SEC, according to a Berenberg report. This action will be similar to those that the regulator has taken against trading platforms Bittrex and Kraken in the past few months.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
