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June 2 (MT Newswires) -- Former U.S. Securities and Exchange Commission official John Reed Stark issued a warning to crypto influencers, cautioning them about potential prosecution. Stark's tweet on Tuesday singled out social media crypto influencers who have endorsed questionable crypto projects and facilitated market manipulation, particularly during the bullish market period.
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The former chief of the SEC's Office of Internet Enforcement emphasized that anti-fraud regulations apply to all forms of price manipulation, whether it involves exchange-listed securities, penny stocks or crypto securities. According to Stark, the days of social media crypto influencers are numbered.
The former SEC chief pointed out that the nature of securities fraud makes it relatively easier to detect and prosecute, unlike other types of fraud where perpetrators often attempt to conceal their identities.
To illustrate his point, Stark referred to the case of Francis Sabo, a crypto influencer who faced charges in a $100 million securities fraud case and utilized social media platforms to manipulate the prices of exchange-traded stocks.
Other instances of crypto influencers violating securities laws have also surfaced. One well-known case involved Kim Kardashian, who was fined $1.26 million for promoting a fraudulent project.
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