On Sunday, the Securities and Exchange Commission (SEC) issued a summon via a media report. The subpoena was addressed to crypto asset influencers supporting PulseChain, HEX, and PulseX.
SEC Rounds Up Influencers Through Subpoena
Eric Wall, a Swedish researcher, recently released an official memo written by SEC on November 1. A summons followed the letter addressed to specific project influencers. These individuals are said to withhold data and documents crucial to a proceeding investigation.
As per the subpoena, SEC required the parties involved to hand over said data and documents on or before November 15. The agency revealed that without this information, progressing with the investigation might prove torrid.
Crypto influencers use social media coverage for advertising a new or existing blockchain or crypto asset. Introducing such projects to the public becomes easy through their influence. Recently, influencers have been increasingly supporting innovations in the crypto industry.
Undoubtedly, influencers can easily reach prospective investors through their platforms. Because, in most cases, people tend to follow famous individuals. So, they use this means to draw much attention to such projects and allure an outsized audience.
However, unfortunately, many of these projects influencers present to the public are hoaxes. They end up being pump-and-dump schemes designed by developers to swindle unlucky investors of their funds.
SEC Goes After Suspicious Crypto-based Projects
Kim Kardashian, a business mogul and social media celebrity, recently got involved in a related project. Last month, she promoted a project dubbed Ethereum Max on Instagram. Consequently, SEC went after her claiming she was supporting a sham project that could cost naïve individuals much money.
According to SEC, the project was a pump-and-dump scheme. Hence, the agency fined her $1.26 million for refusing to report that she received £250,000 to promote the project. Gary Gensler, SEC Chairman, iterated that a project is not genuine because a celebrity endorses it.
Ben Armstrong, a renowned YouTuber and crypto influencer, narrated a similar experience in August. Ben said he once collaborated with a project that wound us as a sham. Hence, warned investors to be careful of the projects they invest in.
It is worth knowing that influencers are remunerated to vouch for a project. Therefore, in most cases, they may be oblivious to these projects’ risks.