Crypto influencers may need to practice what they preach and “do their own research” when it comes to sharing their cryptocurrency advice.
According to several digital asset attorneys, the common disclaimer “This is not financial advice” — may not actually protect them in the eyes of the law.
US securities attorney Matthew Nielsen of Bracewell LLP told Cointelegraph that while it is its “best practice” for influencers to disclose that “this is not financial advice,” simply saying the term will not protect them from the law as “state securities laws are appropriately regulated.” Great who can advise on investment.”
Australian financial regulatory attorney Liam Hennessy, partner at Gadens, explained that the “guidance warnings” are “largely useless,” while Australian digital attorney Michael Pasina of Piper Alderman added that they are not “magic words which, when uttered, would deny liability.”
Crypto influencers and celebrity ambassadors are increasingly finding themselves under the scrutiny of regulations, particularly in the United States.
Nielsen cited Kim Kardashian’s recent case as an example, in which the Securities and Exchange Commission accused Kardashian of not disclosing the amount she received for promoting EthereumMax to her followers.
Influencers are feeling the pressure
Crypto influencer Mason Versluis, also known as Crypto Mason, who has more than a million followers on TikTok, told Cointelegraph that he could not stress enough to his followers that its content should not be considered “financial advice.”
However, Verslow said that despite the use of the disclaimer “This is not financial advice,” it is important for influencers to realize that some people are making “financial moves according to what some influencers say.”
He also stressed how difficult it is to determine whether a project will end up in a “rug-pull” situation because influencers “simply deal with the marketing team”, and generally do not have contact “with any of the developers or owners”.
Australian crypto influencer Evan Vantiatu, aka Crypto Serpent who has amassed 68,000 followers on TikTok, says that influencers should do their due diligence in researching a crypto project before conducting a promotion.
Related: Australian Crypto ‘Influencers’ Face Tough New Legal Restrictions
Hennessy believes that the best way to protect crypto influencers is to be able to determine “what is a security token and what is not a security token.”
He further explained that it is critical to understand that “a derivative is a product that derives its value from something else”, and you could be “criminally liable” for promoting derivatives.
Meanwhile, Pasina noted that the Australia-based influencer is required to have a license to provide financial advice, and that it “will not provide any protection disclaimer.”