Former SEC chief warns influencers about prosecution for crypto price manipulation

The U.S. Securities and Exchange Commission (SEC) is going after cryptocurrency influencers found promoting fraudulent projects and manipulating the price of certain tokens through social media. Former SEC Director John Reid Stark has taken to Twitter to warn cryptocurrency influencers that he is prepared to be prosecuted.

Beware of all crypto promoters who use social media to manipulate the price of cryptocurrency securities. Do not fail and risk. Not only will you eventually be arrested, but the prosecution will be like shooting the fish in the barrel.

Whether it’s currency manipulation… pic.twitter.com/AfKROIlR0N

— John Reed Stark (@JohnReedStark) May 30, 2023

In a tweet, Stark blasted cryptocurrency influencers on social media. They have poured money into numerous shoddy cryptocurrency projects and often helped manipulate market prices during bull markets. He warned that the era of crypto influencers on social media is coming to an end, as the same anti-fraud rules apply to any form of price manipulation, including listed securities, penny stock securities, and cryptocurrency securities.

The former SEC chief drew attention to the brazen and arrogant ways so many social media influencers make their victims uncomfortable. Most of the shilling and price manipulation is done through social media platforms such as Twitter, Discord, Instagram and Reddit. Stark noted that the nature of securities fraud makes it easier to detect and prosecute, unlike other forms of fraud in which perpetrators often hide their identities.

“Regulators and law enforcement can discover an extraordinary, brilliant trail of convincing and vivid incriminating evidence simply by turning on their computers. , has become the virtual rope that many of our crypto buddies (and our crypto sisters) use to hang themselves,” Stark explained.

Stark cites notorious crypto influencer Francis Szabo as an example. Paid Used social media platforms to manipulate publicly traded stocks in a $100 million securities fraud case.

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Aside from Sabo, there have been numerous instances where crypto influencers have been found to have violated securities laws. The most famous case is that of Kim Kardashian, who was fined $1.26 million for promoting a fraudulent project.

Another major influencer facing the law is Bitboy Crypto, who has faced much public outrage for promoting a shady project. On March 31, the YouTuber was named in a $1 billion lawsuit for promoting unregistered securities. In November 2022, the SEC also issued multiple subpoenas against influencers for promoting Hex (HEX), Pulsechain (PLS), and PulseX (PLSX) tokens.

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