Securities Exchange Commission has reviewed its guidelines to prescribe three-year jail terms for Nigerian celebrities and social media influencers who promote cryptocurrency platforms and assets without labelling their posts as sponsored content. Following numerous reported scams orchestrated by cryptocurrency platforms which were highly promoted by public figures with large followers, SEC has revised its guidelines to slap stiff sanctions on celebrities supporting the fraudulent crypto sites.“Finfluencers who receive compensation to promote digital asset products or services shall disclose this arrangement to their followers.
Failure to do so will result in a penalty of not less than 10 million, imprisonment for up to three years, or both,” stated the SEC directive. This comes as citizens count their losses after investing in fraudulent crypto platforms promoted by popular entertainment figures. Their misplaced trust in the celebrity leads them to blindly invest in any content posted on social media without conducting additional research.
SEC has also mandated celebrities and influencers to do their due diligence in verifying that their crypto client is SEC-licensed and approved before promoting their contents. “Finfluencers shall before engaging in any promotional activities verify that both the VASP, products and services they intend to promote are licensed or approved by the commission,” stated the SEC guideline. The commission said officers would be actively monitoring online crypto promotions to fish out violators of the directive and initiate prosecution procedures. It is however, unclear whether the directive applies to popular social media platforms such as Instablog9ja, Gossipmill9ja and others who from time to time promote these crypto sites.
SEC to prosecute celebrities, influencers promoting crypto assets without ‘sponsored’ labels for followers
