The influencers failed to disclose the compensation they received for promoting the now-bankrupt crypto exchange.
A class-action lawsuit has named famous finance influencers on YouTube for their role in promoting cryptocurrency exchange FTX and sued them for $1 billion in damages,
reported. Founded by Sam Bankman-Fried , FTX was one of the most popular crypto exchanges in the world before it filed for bankruptcy in November last year.Social media influencers are people who promote products to their large number of followers, creating an impression that they themselves have used the product and trust it. However, it is common practice for influencers to promote products after receiving a fee from their promoters, which they may not necessarily disclose to their audience.
According to the Securities and Exchange Commission in the U.S., the securities laws apply to cryptocurrencies even though many in the cryptocurrency industry have argued against it. Including cryptocurrency as securities attract intense standards for their advertisement, something that the plaintiffs are hoping for as they seek $1 billion in damages.
If the FTX accounts are considered securities, the YouTubers could be liable for not sharing how much FTX paid them. As per a previous
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