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Social Media Influencers As Promoted Crypto ICOs

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The US Securities and Exchange Commission (SEC) is actively spreading on crypto initial coin offering (ICO) projects, and a senior officer said earlier this year that tens of cases are dependent. [1

9659004] Next violence of enforcement by the SEC, stimulated by its latest deal with professional boxer Floyd Mayweather and music producer DJ Khaled, is expected to be on social media influencers that have promoted ICO to the public.

When is ICO Promotion a Fraud

Author, YouTube Celebrities, Cryptocurrency Review Platforms, Publications, and many more individuals and organizations could be directed by the SEC if there is sufficient evidence to prove that an individual or organization received compensation from the ICO organizers to promote a token sale, without revealing the amount received from an ICO project to the target group.

“Every celebrity or other person who promotes a virtual token or c oin it is a security must disclose the nature, extent and amount of compensation received in exchange for the campaign,” said the secretary last year, stressing that failure to disclose compensation is considered be a deceptive business.

On November 28, the SEC followed up on its previous statement and said investors must be aware of celebrities that promote tokens on blockchain. The Commission said:

“Investors should be skeptical about investment advice published on social media, and should not make decisions based on celebrity reports. Social media often affect payers, not investors, and the securities they exercise, whether issued with traditional certificates or on blockchain can be fraud. “

If a celebrity openly promotes an ICO after receiving a payment to do so, and ICO is considered a SEC security, the person may be considered a violation of US Securities Regulations by the SEC.

Most ICOs are securities

Over the past seven months, Coinbase, the largest fiat-to-crypto exchange on the US market, has worked with regulatory agencies to list additional digital assets on its platform.

In May, Coinbase announced its interest in listing Stellar (XLM), Cardano (ADA), 0x (ZRX), Zcash (ZEC) and Basic Attention Token (BAT). Fast forward for almost seven months, the exchange has only been able to add three of the five crypto curves that it constituted to integrate.

Coinbase has been careful to ensure that a digital asset is not recognized as security by the SEC because a hypothetical case that an asset listed by a stock exchange is declared a security by the US government, the exchange may be prosecuted for unauthorized distribution of unregistered securities .

On Tuesday, reported that Jay Clayton, the chairman of the SEC, said that the Commission sees most ICOs in the global securities market:

“We do not think Bitcoin is a security. Many of the ICOs as you see and you are talking about they are securities. And if you are to offer or sell securities, you must do it in accordance with our laws. We have clarified. The latest actions further emphasized that our securities laws apply to ICO- space and if people are to make money by using the first coin, they must either do it privately or register with the SEC. “

Promoting an ICO as recognized as a security without revealing compensation to the target audience can result in a penalty twice the amount of compensation itself, as stated by Floyd Mayweather who paid over $ 600,000 to receive $ 300,000 to promote three ICOs.

Excellent image from Shutterstock.

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