Former SEC chief warns influencers about prosecution for crypto price manipulation
The United States Securities and Exchange Commission (SEC) is pursuing crypto influencers who have promoted scam projects and are found to be manipulating the prices of certain tokens via social media. Former SEC chief John Reed Stark took to Twitter to warn crypto influencers to be ready to face prosecution.
Attention all crypto promoters who use social media to manipulate the price of crypto-securities: Fail not at your peril. Not only will you eventually get caught, but your prosecution will also be like shooting fish in a barrel.Whether manipulating the price of exchange… pic.twitter.com/AfKROIlR0N
In his tweet, Stark called out social media crypto influencers who shilled numerous sketchy crypto projects and often helped them manipulate market prices during the bull run. He warned that for any form of price manipulation — be it the price of exchange-listed securities, penny stock securities or crypto securities — the same anti-fraud rules apply, and the days of social media crypto influencers are numbered.
The former SEC chief drew attention to the brazen and arrogant way in which so many social media influencers grift their victims. Most shilling and price manipulation occurs via social media platforms like Twitter, Discord, Instagram or Reddit. Stark noted that the nature of securities fraud makes it easier to detect and prosecute, unlike other forms of fraud where the perpetrator often tries to hide behind their identity.
Stark cited the example of notorious crypto influencer Francis Sabo, who was charged in a $100 million securities fraud case and used social media platforms to manipulate exchange-traded stocks.
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Apart from Sabo,
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