The relationship of celebrities with encrypted virtual currencies

The relationship of celebrities with encrypted virtual currencies

Celebrity legal experts have warned against using their fame to raise money for virtual currencies, as this could put them at risk of legal action against them by lawmakers and investors. The warnings come in the wake of an American case that highlighted the involvement of celebrities in promoting a fraudulent virtual currency.

The US Securities and Exchange Commission last week accused two men of receiving $ 32 million from thousands of investors through a virtual currency offering, a collective funding mechanism used to raise funds for virtual currency projects. The Commission claimed that the two men had raised money for their fraudulent company, Sintra, and solicited celebrities to promote their company, such as Boxer Floyd Mayweather and DJ Khaled.

Although the commission did not include celebrities on its charges, it has spotted and announced their participation in an unusual move because they are not defendants in the case. Experts said celebrities who promoted fraudulent fraud could face legal action by lawmakers and investors.

"The committee has left the door open to prosecute celebrities or others who broke the law and promoted currency launches," said former attorney and partner at Paul Hastings, Nick Morgan.

The popularity of currency launches increased last year because of rising virtual currency prices. During the boom, many claimed that securities laws did not apply to the new way of increasing capital, and many celebrities used their accounts in social networking sites to promote virtual currencies, Oscar-winning Jamie Foxx, who posted a tweet on Twitter to promote a currency launch for his 5 million-year-old followers, while Paris Hilton used Tottiere and Entragram to announce their participation in a currency auction.

The coding sector is under growing legal scrutiny as some legislators have made it clear that the new technology should be subject to securities laws, especially after research published by his company, "Satis Group", showed that 81% of currency launches from the beginning of 2017 until March 2018 were fraudulent .

A professor at Cornell Law School, Charles Whitehead, warned that promoters may face legal action in the event of promoting a currency unregistered by legislators, which violates the rules of the market, pointing out that US laws strictly regulate advertising on the sale of new securities.

For his part, the chairman of the committee, Jay Clayton, said that companies need to abide by the financial laws in the event of qualifying currency transactions as a financial tool, adding that every process of offering a currency is a securities, demanding celebrities to disclose the amounts they have to promote currency launches.

There are already dozens of collective lawsuits by disgruntled investors against companies that have launched currency launches in the United States, and with the names of some celebrities at the Sintra Commission's call, the lawsuits can target those who have marketed For those fraudulent companies.

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