SEC To Crackdown On Social Media Influencers Shilling Crypto, Former Official Warns

Former SEC official John Reed has warned social media influencers who are shilling cryptocurrencies and manipulating their prices that their days are numbered.

The former official warned that these influencers would face the same anti-fraud rules that apply for manipulating the price of exchange listed-securities.

SEC to crackdown on influencers manipulating crypto prices

There has been a surge of influencers and so called analysts forcing cryptocurrencies down their viewers’ throat recently. Reed warned that these influencers will be dealt swiftly by the SEC.” What amazes me most about crypto promoters in particular is the brazen and arrogant way so many of them grift their victims — always in plain view,” the former SEC official wrote on Twitter. Crypto industry is still a wild west in terms of regulations in the US and around the world. These regulation loopholes let influencers off the hook when engaging in such fraud and manipulating the prices of cryptocurrencies for their benefits.

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The case of Ricky Bobby

John Reed cited the example of Ricky Bobby’s case where the SEC brought partially settled charges against Francis Sabo (also known as “Ricky Bobby”) in a $100 million securities fraud scheme. Sabo, along with several other defendants previously charged by the SEC in December 2022, used social media platforms to manipulate exchange-traded stocks. The SEC claimed Sabo promoted himself as a trustworthy stock-picking guru and cultivated a substantial following in the Atlas Trading forum on Discord, a free online forum purporting to provide educational content about trading and securities markets.

The indictment is based on public statements posted to Twitter and from records of private conversations involving the accused group’s members. This case should serve as a warning to influencers shilling cryptocurrencies only for exit liquidity.