Cryptocurrency influencers might need to “do their own research” and put what they preach into practice when it comes to sharing their crypto tips.
The common disclaimer “This is not financial advice” may not actually shield them in the eyes of the law, numerous digital asset attorneys claimed in an interview with Cointelegraph.
Although it’s “best practice,” according to US-based securities lawyer Matthew Nielsen of Bracewell LLP, for influencers to disclose that “this is not financial advice,” merely using that phrase will not shield them from legal liability because “federal and state securities laws heavily regulate who can offer investment advice.”
Liam Hennessy, a partner at Gadens in Australia, noted that “advice warnings” are “by and large quite useless,” while Michael Bacina, of Piper Alderman in Australia, added that they aren’t “magic words which when uttered will disclaim liability.”
Crypto influencers and celebrity advocates are coming under more and more regulatory scrutiny, especially in the United States. Meanwhile, any influencer residing in Australia is obligated to obtain a license to give out financial advice and no disclaimer is going to give protection.
Nielsen used the recent SEC charge against Kim Kardashian for failing to report the amount she received in exchange for promoting EthereumMax (EMAX) to her fan base as an example.
Influencers should keep in mind that some people do make financial decisions based on what specific influencers say, despite the caveat that “This is not financial advice.” Influencers are now frequently advised to conduct thorough study on a cryptocurrency project before undertaking a promotion.