Scottsdale, AZ - Dec 3, 2018 - Yesterday, only days after the SEC Commissioner Jay Clayton discussed Bitcoin ETFs at the Consensus Invest Conference, DJ Khaled and Floyd Mayweather found themselves charged by the SEC for promoting ICO investments without revealing that they'd been paid, according to CNN.
“The pair both settled, agreeing not to promote any securities, including those that are digital, for several years,” noted Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading technology that powers global equities, derivatives, and cryptocurrency exchanges. “The truth is that these celebrity endorsements are a systemic problem within crypto, and the general public doesn’t understand that celebrities attach themselves to a project, typically, in exchange for payment.”
“The problem, in this case, was that neither actor acknowledged that they were paid in exchange for their promotion. But, beyond that, potential investors need to look at these promotions the same way they would if they were for a soft drink or footwear. If you saw them promoting a soft drink on Twitter, you’d figure they were collecting a paycheck for their Tweet rather than that they really enjoyed the taste of the beverage, right? Same thing. These guys aren’t investment professionals,” explained Gardner.
Endorsements and promotions in the crypto space can also be used as part of pump-and-dump schemes to coordinate the movement of buyers towards a particular coin, artificially inflating its value before selling it off, making a substantial profit at the expense of other investors.
“While this is the first time the SEC has brought charges against individuals for promoting ICOs, it is definitely a step in the right direction,” said Gardner. “Earlier this year, in an attempt to bring responsible oversight and self-regulation to the industry, Modulus introduced a proprietary Surveillance & Risk Management Solution, utilizing machine learning to identify and, ultimately, enable cryptocurrency exchange administrators to bring an end to money laundering, abusive trading behavior, and market manipulation -- including pump and dumps.”
Modulus has been developing high-frequency trading systems, exchanges, trade surveillance systems, and risk management systems for over twenty years.
About Modulus:
Since 1997, Modulus has provided advanced financial technology products and services to professional traders, brokerages, trading firms, and educational, governmental, and non-profit institutions throughout 94 countries. The company's products and services reach millions of users around the world.
To schedule an interview with CEO Richard Gardner, contact Modulus Chief Communications Officer, Charles Catania at c.catania@modulusglobal.com.
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