Each month, our panel of crypto lawyers looks at the legal implications of some of the thorniest problems facing the industry in different jurisdictions around the world.
At their best, key opinion leaders (KOLs) and social media influencers play an important role in crypto, educating their followers and highlighting new trends and opportunities.
At worst, though, they’re paid shills taking large allocations of coins to promote projects without proper disclosures. Sometimes, they endorse memecoin scams and pump-and-dumps (wittingly or unwittingly).
So, is this legal? When you get conned by your favorite influencer’s posts into buying Shitcoin 2000 on the promise of a once-in-a-lifetime opportunity and then lose all your dough to a rug pull the next day, is there any legal recourse?
Haliey Welch, the “Hawk tuah” influencer who went viral earlier this year, is the latest embroiled in controversy over allegations of insider trading and foul play involving a memecoin she launched. She denies the claims.
At least one investor filed a complaint with the US Securities and Exchange Commission, and legal experts suggest that if the regulator launches an investigation, it may lead to civil securities fraud charges, while the Department of Justice (DOJ) may opt to pursue criminal charges.
There are different laws in different regions, so Magazine spoke with Joshua Chu, co-chair of the Hong Kong Web3 Association, and legal experts at Digital and Analogue partners, Catherine Smirnova and Yuriy Brisov in the UK and Europe, to find out.
The discussion has been edited for clarity and brevity.
Magazine: What legal responsibilities do crypto influencers have to ensure their token endorsements are not misleading?
Smirnova: Finfluencers, or finance influencers, in the United Kingdom are obliged to get registered. This term was born in the EU, and we even have a cool website created by the European Commission,…
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