SEC Issues Stinging Statement On Unlawful ICO Promotions
The US’ Securities and Exchange Commission (SEC) has been little more than a sleeping giant when it comes to crypto, but today’s statement on unlawful ICO promotion activities shows the top watchdog is waking up. The statement honed in on celebrities “shilling” coins without disclosing financial compensations for doing so.
Coming out of the SEC Division of Enforcement and the SEC Office of Compliance Inspections and Examinations, the announcement was officially titled the “Statement on Potentially Unlawful Promotion of Initial Coin Offerings and Other Investments by Celebrities and Others.”
The agency went straight to the point:
“Celebrities and others are using social media networks to encourage the public to purchase stocks and other investments. These endorsements may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement.”
“The SEC’s Enforcement Division and Office of Compliance Inspections and Examinations encourage investors to be wary of investment opportunities that sound too good to be true.”
“We encourage investors to research potential investments rather than rely on paid endorsements from artists, sports figures, or other icons.”
The takeaway is clear, then: the SEC is preparing to make ICOs and their representatives—whoever they may be—comply with all federal securities laws.
SEC’s Looking At You, Floyd Mayweather and Co.
The SEC’s warning takes aim at celebs who are marketing coins to the crypto space while taking large, undisclosed paydays.
Consider Paris Hilton, for example, who infamously backed LydianCoin just weeks ago.
And even more notoriously is world champion boxer Floyd Mayweather, who recently told the press “You can call me Floyd Crypto Mayweather” after publicly repping the Stox.com ICO.
Per the SEC’s latest statement, then, these celebs will need to lawyer-up going forward if they plan to keep shilling without declaring their actions as such.
What’s your opinion? Did the SEC do the right thing with their announcement? Be sure to sound off in the comments below!
Images via Flickr, ABC News