The Securities and Exchange Commission (SEC) of the United States has targeted crypto influencers who advocate fraudulent enterprises. For personal gain, these influencers manipulate cryptocurrency prices on social media. They often use the Pump and Dump techniques to accomplish this. Former SEC Chairman John Reed Stark recently took to Twitter to warn these influencers of possible legal action.
Stark emphasized the audacity with which many social media influencers attempt to deceive their followers. He stressed the anti-fraud provisions that apply to stock and securities price manipulation, which is very prohibited. The SEC should make it impossible for these powerful people to escape the consequences of their behavior.
The majority of such illicit actions take place on well-known social media platforms such as Twitter, Discord, Instagram, and Reddit. These occur far too frequently, and the only people who benefit from them are the creators. These can also lead to a lot of market frustration among new customers entering the crypto realm.
The primary distinction is that exchange-traded securities are easy to identify, whereas crypto is far more difficult due to its nature. Moreover, Francis Sabo, a well-known crypto influencer who was charged in a $100 million securities fraud case, is one significant example given by Stark. Sabo had manipulated the pricing of exchange-traded stocks through social media channels.
🚨Former SEC chief warns influencers about prosecution for #crypto price manipulation.
— Walletor (@walletorapp) May 31, 2023
The SEC’s crackdown on crypto influences should be only one aspect of the SEC’s larger measures to protect investors and preserve the crypto market. The SEC has issued fines and cease and desist orders to influencers who have engaged in fraudulent activity in recent years.
Because of the growing popularity of cryptocurrencies, authorities and law enforcement have become more alert.
Lastly, the era of social media crypto influencers influencing bitcoin prices without repercussions is numbered. The SEC is committed to bringing these deceptive individuals to justice. Making sure that they are safeguarding investors and maintaining the integrity of the DeFi community.