The Twitter crypto community, especially its influencers and commentators, prepared to tackle last weekend as the U.S. Securities and Exchange Commission (SEC) fined both boxing legend Floyd Mayweather and music artiste, DJ Khaled for violating their regulations by promoting ICOs and collecting payments without disclosing the amount they received for the promotion to their target audience.
The fine, which saw Mayweather shell out over $600,000, an amount twice what he received for the promotion of the ICOs and DJ Khaled also spitting out an undisclosed sum to the SEC, has been the biggest news in the cryptocurrency space this weekend. The fines paid by these two has also led to a series of rumors hinting at the SEC cracking down on several ICO social media influencers and writers who receive remuneration to promote these ICOs.
SEC’s Interference in Cryptocurrency
The SEC has begun a crackdown on the ICO subsection of cryptocurrency which is already experiencing mass dilemma as a result of the low turnout of funds stemming from the drop in the cryptocurrency market capitalization and pulling out of investors from the cryptocurrency market. DJ Khaled and Floyd Mayweather, both celebrities in real life and on social media with a huge number of followers, were hit with a lawsuit by the SEC. The SEC is known for always interfering in the cryptocurrency space, with ICOs avoiding targeting Americans as one of its lasting effects. Before Americans can legally participate in a token sale, an ICO has to be registered with the SEC, notwithstanding the fact the company might not be based in the U.S. and becoming subject to U.S. financial laws and regulations. The SEC fined both celebrities for promoting token sales while receiving payment without disclosing to their target audience the amount they received, which is a violation of their regulations.
When the news of the indictment of both Khaled and Mayweather hit the crypto market, it was taken with a pinch of salt, and several in the crypto space made jokes about the news with some even going as far as photoshopping images to make it seem like the SEC messaged them on Twitter. This news, however, has received increasing brow furrowing, especially for ICO influencers. On November 1, 2017, the SEC issued a regulation stating that;
“Any celebrity or other individual who promotes a virtual token or coin that is a security must disclose the nature, scope, and amount of compensation received in exchange for the promotion.”
Top Influencers React SEC’s Crackdown
The statement was received with mixed reactions with some who relied on paid promotions from ICOs to survive stating that the end was near for them. The fines paid by Mayweather and Khaled has seemingly shifted forward the ‘end’ that was predicted. Some influencers, however, have indicated that an action made against them wouldn’t be treated lightly. John McAfee, the most active on the cryptocurrency space, especially on Twitter made a harsh statement concerning the recent happenings in the financial part of the crypto world. He wrote on Twitter;
“Me? Worried about the SEC? I have openly, publicly and in the media ridiculed that corrupt, puss filled, bile dripping abcess on the fabric of America. Come for me SEC. I will, in every media outlet in this country, rip you a new asshole worthy of parking a tractor-trailer in.”
McAfee has previously applauded several altcoins on a series he created on Twitter, “Coin of The Day.” It isn’t known whether he received payments for promoting these coins, but the McAfee Crypto Team revealed that for each promotional tweet, he received $105,000. The revelation then prompted several in the crypto space to question John about his association with the SEC, and that prompted his above tweet.
Other influencers have also made statements concerning the SEC with crypto-friendly lawyer Jake Chervinsky stating that there was a good chance top the SEC would not indict cryptocurrency influencers because they didn’t have the resources to go after several influencers who promoted ICOs.
A lot of ICOs have come under scrutiny by the U.S. SEC. The SEC recently charged AirFox and ParagonCoin for selling tokens without a license or approval by a regulatory body. The financial regulatory body also recently fined decentralized exchange, EtherDelta’s founder clarifying that it wasn’t a fan of fundraising through ICOs.