Crypto influencers may need to practice what they preach and “do their own research” when it comes to sharing their crypto tips.
According to several digital asset lawyers, the popular disclaimer “this is not financial advice” – may not protect them in the eyes of the law.
US securities attorney Matthew Nielsen of Bracewell LLP told Cointelegraph that while its “best practice” for influencers discloses that “this is not financial advice”, simply saying the term will not protect them from harm. the law because “federal and state securities laws heavily regulate who can offer investment advice.
Australian financial regulatory lawyer Liam Hennessy, a partner at Gadens, explained that the “advice warnings” are “on the whole pretty unnecessary”, while Australian digital lawyer Michael Bacina of Piper Alderman added that they are not “magic words which, when spoken, will belie responsibility.”
Crypto influencers and celebrity ambassadors are increasingly finding themselves under the scrutiny of regulations, especially in the United States.
Nielsen quoted the Kim Kardashian’s recent affair as an example, where Kardashian was accused by the SEC of not disclosing the amount she received for promoting EthereumMax to her subscribers.
Influencers are feeling the pressure
Crypto influencer Mason Versluis, aka Crypto Mason, who has over a million followers on Tik Tok, told Cointelegraph he can’t stress enough to his followers that his content shouldn’t “to be considered financial advice”.
Versluis said, however, that despite using the disclaimer “this is not financial advice,” it’s important for influencers to be aware that some people “make money moves according to what some influencers say.”
He also pointed out how difficult it can be to determine whether a project will end up in a “rug pull” situation because influencers “just deal with the marketing team” and generally have no contact “with any of the developers or owners”.
Australian crypto influencer Ivan Vantagiato aka Crypto Serpent, who has amassed 68,000 followers on Tik Tok, says influencers should do their due diligence by researching a crypto project before launching a promotion.
Related: Australian Crypto “Finfluencers” Face Tough New Legal Restrictions
Hennessy believes the best way for crypto influencers to protect themselves is to be able to determine “which token is a security and which token is not a security.”
He further explained that it is essential to understand that a “derivative is a product that derives its value from something else” and that you can be “criminally liable” for promoting derivatives.
Meanwhile, Bacina noted that an influencer residing in Australia is required to have a license to give financial advice, and that “no disclaimer will provide protection.”