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Former SEC Executive Forecasts Crypto Influencers Crackdown

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John Reed former SEC official hints that the time of crypto influencers on the platforms may be limited since SEC is preparing to take action against them.

John Reed  Believes Crypto Regulation Is Essential

SEC

Source: Twitter

Due to the increasing fame of cryptos and the influence generated by social media influencers, some investors fall prey to crypto scams and fraudulent promotions.

Former Security and Exchange Commission (SEC) official John Reed, believes that it is important to curtail the possible fraudulent and manipulation practices within the space.

As a result, the former SEC’s (Securities and Exchange Commission’s) official fired a warning to all social media personalities and crypto influencers.

He hinted that their reign on social media is coming to an end since the SEC is getting ready to attack them soon.

Reed stressed that the anti-fraud policies that fight against influencing exchange-listed securities prices, will also extend to cryptocurrency influencers.

Thus, crypto influencers will likely face dire consequences in due course.

notably, the number of self-proclaimed experts and influencers who advocate for cryptos is on the rise.

The former SEC official warns these social media personalities that the Securities and Exchange Commission (SEC), will take action against them very soon.

READ ALSO: US Delegates Visit Brussel to Learn EU’s Landmark Crypto Law

What Prompted Reed’s Warnings?

Reed was astonished to notice that the social media influencers are using their position to swindle customers in plain sight.

He expressed his shock at the arrogant and audacious way by which these influencers blatantly swindle their victims.

Also, the SEC’s former official believes that it is important to hold them responsible for their actions.

He believes that doing so will ensure investor protection in the ever-changing nature of digital assets.

Additionally, Reed cited the case of Ricky Bobby as an instance of the possible harm linked to cryptocurrency promotion.

Previously, the Securities and Exchange Commission filed charges against Francis Sabo alias “Ricky Bobby” for his participation in a $100 million securities fraud plot.

READ ALSO: US Debt Ceiling Program Calls Off 30% Bitcoin Mining Tax

Reportedly, Sabo and other defendants influenced exchange-traded equities via social media.

During the conspiracy, Sabo presented himself as a dependable stock-picker which he used to gather notable followers in the Atlas Trading community on Discord.

Discord is an online platform for voice video and text chat that some traders and influencers use to pass information.

More Details

The allegations against Sabo are public statements posted on Twitter as well as private conversation recordings inside the organization.

Reed cited this particular case as a warning to those influencers who are promoting cryptos to improve their exit strategies.

The former SEC official warns that the government agency will closely monitor and investigate such conspiracies to keep a transparent and fair marketplace for users.

Many notable celebrities such as Drake and Kim Kardashian faced regulatory pressure and class-action suits for promoting dubious crypto-projects.

The regulators believe that these promoters should clearly state that they received payment for promotion and issue a disclaimer for potential investors.

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