|Location||Washington, United States|
|Date Posted||November 6, 2017|
Business & Finance
The US Securities and Exchange Commission has warned celebrities about endorsing initial coin offerings which are a type of crowdsale method of raising funds on the Blockchain.
Notable celebrities such a Floyd Mayweather, Paris Hilton and Wu-Tang Clan's Ghostface Killah and Jamie Foxx have all recently backed Blockchain companies and have been involved in the promotion of raising funds through social media channels.
The Securities and Exchange Commission (SEC) said the endorsements could break laws on selling securities.
Anyone promoting crypto-currencies must say if they are being paid for the endorsement.
The SEC pointed towards the growing numbers of celebrities who have driven ICO funding drives to raise cash, according to the New York times ICO’s have raised around $3 Billion dollars in 2017.
Although Blockchain technology is fairly new unbeknown to many ICO’s are subject to the same lows that already govern stocks and shares you can purchase on stock markets.
"A failure to disclose this information is a violation of the anti-touting provisions of the federal securities laws," it said, adding that keeping quiet about any financial arrangement could be considered fraudulent.
It said it was keeping an eye on people who promote the crypto-currencies to ensure laws were not broken.
CEO of CoinSpectator said "With the current price of Bitcoin exceeding $7,000 dollars, the latest Bitcoin news is vital for traders, investors and hobbyists involved in the space, any promotion from celebrities must be taken with a pinch of salt"
Regulators in Switzerland, Britain recently issued warnings about the risks associated with initial coin offerings.
As with all stocks, shares, ICO’s or any investment you should carry out your own due diligence and ignore advice from celebrities who will be most likely to have received a payment or have a financial interest in the company.