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According to a report by Reuters, positive, paid reviews by popular cryptocurrency "experts" and social media personalities are widely available. Reuters talked to "more than two dozen people in the cryptocurrency market," but the first example they cited is a textbook case of the practice. The CEO of a Ukrainian cryptocurrency startup called Hacken paid $7,500 to Christopher Greene, host of the popular Alternative Media Television YouTube channel. Greene posted a very positive review of Hacken's coin, allegedly without mentioning the payment anywhere in the video, and the cryptocurrency's value shot up 14 percent. While a sensationalist, high energy YouTube reviews was the first thing I pictured while reading the article's description, AMTV's Hacken review is actually calm, collected and deceptively professional. Reuters claims Hacken's approach is the archetypal example of " a pay-for-play hype machine that churns out recommendations viewed by hundreds of thousands of hungry investors."
The SEC issued a more specific warning about promotion of online fundraisers known as initial coin offerings (ICOs) on Nov. 1 last year. "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," the SEC said in a public statement posted on its website. Failure to do so is a violation of anti-touting provisions of federal securities laws, and may also be fraud, the SEC said. The SEC has not issued determinations on which cryptocurrencies it regards as securities. But the agency has brought enforcement actions against a dozen or so companies connected to ICOs, some of which the agency has identified as unregistered securities offerings, and therefore subject to its regulation.
The SEC issued a more specific warning about promotion of online fundraisers known as initial coin offerings (ICOs) on Nov. 1 last year. "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," the SEC said in a public statement posted on its website. Failure to do so is a violation of anti-touting provisions of federal securities laws, and may also be fraud, the SEC said. The SEC has not issued determinations on which cryptocurrencies it regards as securities. But the agency has brought enforcement actions against a dozen or so companies connected to ICOs, some of which the agency has identified as unregistered securities offerings, and therefore subject to its regulation.