Beware Social Media Influencers Promoting Crypto Investments, Says SEC

The Securities and Exchange Commission (SEC) has reminded crypto investors to be cautious about information posted to social media. According to the SEC, big social media accounts and “influencers” are often paid to promote crypto projects, tokens, and securities that might be fraudulent.

The reminder comes after the SEC fined two celebrities last week for promoting cryptocurrencies without disclosing they were paid to do so.

Boxer Floyd Mayweather Jr received $300,000 to promote three initial coin offerings (ICOs) to his large social media following, while DJ Khaled was paid $50,000 to promote Centra’s ICO. Neither individual disclosed to their followers that their endorsement was paid.

Mayweather was subsequently fined more than $600,000 and is banned from promoting securities for three years.

The SEC explained: “These cases highlight the importance of full disclosure to investors… With no disclosure of payment, Mayweather and Khaled’s ICO promotions may have appeared to be unbiased, rather than paid endorsements.”

It’s a reminder to any crypto investor: do your own research. Don’t trust the opinions of others as you never know the true motivations behind their advice.

(Source: Securities and Exchange Commission)

Further reading: How to Evaluate a Cryptocurrency Before You Invest (The GGECTRA Checklist)

Ben Brown

Editor, Block Explorer News. Reach me at benjamin-brown.uk

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