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SEC: ICO's celebrity confessions are "potentially illegal"

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The US Securities and Commission (SEC) issued a public statement calling for ICO recommendations of "potentially dangerous" celebrities and warns that celebrities who inappropriately promote security tokens can be held liable for the violation of federal securities laws.

The statement, attributed to the SEC and the inspections, indicates that the celebrity ICO mentions violate securities regulation because they do not properly disclose the source and the amount of any compensation paid. in exchange for the endorsement.

"These endorsements may be illegal if they do not disclose the nature, source and amount of any compensation paid, directly or indirectly, by the corporation in exchange for the benefit of the corporation. endorsement."

This is an important news because, as CCN has reported, the ICOs have hired a myriad of celebrities to support their ICOs and promote them on social media, including familiar names like the legend of boxing Floyd Mayweather actor and record artist Jamie Foxx rapper The Game ] and the footballer Luis Suarez .

Although the SEC did not issue specific guidelines on ICOs, it said earlier this year that the tokens of The DAO, an early ICO that resulted Ethereum Classic, were securities and other OICs could fall under securities laws, too.

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In this latest announcement, the SEC states that anyone who promotes an OIC token that is considered a security under federal law must disclose the exact nature, scope and amount of the compensation in exchange of the approval of the OIC. . If not, the promoter may violate the anti-fraud and anti-fraud provisions of the federal securities laws, making them liable to act as a "non-registered dealer".

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The declaration continues:

"Any celebrity or other individual promoting a token or virtual coin constituting a title must disclose the nature, scope and amount of the compensation The failure to disclose this information is a violation of the anti-vengeance provisions of federal securities laws, and those who make such endorsements may also be held liable for potential violations of anti-vengeance provisions. fraud of federal securities laws, participation in an unregistered bid and sale of securities and acting as unregistered brokers. "

Kathryn Haun, a former federal prosecutor at the Department of Justice who currently sits on the Coinbase Board of Directors, tweeted that she believes that the SEC "sets the stage" "to bring fees related to these endorsements." I bet they've already opened files and that they are working on them as we speak ", she concluded.

Image from Shutterstock to photo

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