Shut up, the next one: SEC targets influencers

In the wake of the conviction of Floyd Mayweather and DJ Khaled, the U.S. Securities and Exchange Commission (SEC) reaffirms its position on Initial Coin Offerings (ICOs). Influencers who do not mark advertising for ICOs as such will face prosecution.

In the future, social media influencers should rather keep their hands off the advertising of dubious ICOs. As SEC Enforcement reports via Twitter, the authorities want to put on harder bandages than prominent ICO promoters.

Social media influencers are often paid promoters, not investment professionals, and the securities they’re touting, regardless of whether they are issued using traditional certificates or on the blockchain, could be frauds.

Freely translated, the cryptosoft tweet reads as follows:

“Social media influencers are often paid advertisers and not professional cryptosoft investors. The assets advertised – whether they are traditional certificates or blockchain assets – could always be fraudulent projects.” More on: onlinebetrug.de

The example of Floyd Mayweather and DJ Khaled can also be seen in this context. The Securities and Exchange Commission accused the US celebrities of unfair advertising campaigns for a dubious ICO. Specifically, the influencers had failed to disclose their salaries for advertising, according to the SEC.

Because postings from celebrities with a large reach “in principle give the impression of being unbiased expressions of opinion and not paid advertising measures”. According to the SEC, this type of misleading is a punishable offence.

However, in order for influencers to be liable to prosecution, the advertised ICOs must be expressly considered securities. Only then do the typical SEC securities regulations take effect. As already reported by BTC-ECHO, the stock exchange supervisory authority now classifies the majority of ICOs in this category.

SEC: ICOs are securities

Since the beginning of the year, hundreds of ICOs have therefore come into the crosshairs of the authorities. Securities, as defined by the SEC, must first register with the supervisory authority. However, since the ICOs previously assumed that their projects did not meet this definition, the incriminated projects failed to register formally. This is now falling on the projects’ feet.

Meanwhile, SEC Chairman Jay Clayton confirmed the authority’s assessment of the legal status of ICOs in an interview with CNBC:

“We do not believe that Bitcoin is a security. Many of the ICOs you see and talk about are securities. And if you want to offer or sell securities, you must do so in accordance with our laws. We were aware that recent actions further confirm that our securities laws apply under ICOs. If people want to raise money with ICOs, they must either do so in a private placement or register with the SEC.”