Leading lights in the cryptocurrency world have responded to last week’s news that two major public figures have been taken to task over the promotion of cryptocurrencies.
Music producer DJ Khalid and boxing star Floyd Mayweather were both charged by the US Securities and Exchange Commission (SEC) over posts they made on social media promoting initial coin offerings (ICOs).
In one of the posts, Mayweather encouraged his followers to pick up tokens from a firm called Centra Tech.
“Get yours before they sell out, I got mine…” he wrote. However, he failed to disclose that he was being paid half a million US dollars to make this post.
In a similar post from DJ Khalid, the producer described Centra Tech’s coin as a “game changer”. He was being paid $50,000, but it was again not disclosed.
The pair now face significant penalties. Mayweather has paid the SEC a total sum of $614,775, while DJ Khalid’s figure is believed to be $152,725.
In the days since these charges were made public, those who are active in the cryptocurrency sphere were quick to share their views on what the developments might mean for the wider crypto industry.
Some focused on the issue of whether SEC guidance around the legalities of promoting ICOs were clear enough. Guidance issued by the SEC last year was unearthed, and this seemed to suggest that people who did promote a cryptocurrency had to declare a great deal of information about the nature of the exchange.
“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 guidance stated.
With regards to the specific case of DJ Khalid and Floyd Mayweather, crypto leaders were quick to point out what they perceived to be the SEC’s shortcomings.
John McAfee, the founder of the computer antivirus software McAfee and a leading cryptocurrency expert, took to Twitter to denounce the SEC publicly as a result of the developments.
“Me? Worried about the SEC? I have openly, publicly and in the media ridiculed that corrupt, puss filled, bile dripping abcess [sic] on the fabric of America. Come for me SEC”, he wrote.
McAfee has himself promoted cryptocurrencies in the past. According to industry press, McAfee was previously paid over $100,000 per promotional message he gave.
Others in the space took a more nuanced view as to what the significance of the case might be.
According to Jake Chervinsky, a lawyer based in Washington DC, it is more likely to be individual complainants rather than the SEC who make the decision to chase down those who promoted ICOs in an allegedly unlawful manner.
“I don’t think the SEC has the resources or desire to go after YouTube & Twitter influencers who shilled ICOs to their subscribers & followers”, he wrote on Twitter.
“I absolutely *do* think plaintiffs who bought into ICOs based on those influencers’ secret paid promotions will name them in litigation”, he added.