Saying ‘It’s Not Financial Advice’ Won’t Get You Out Of Jail: Crypto Lawyer

Crypto influencers may need to live up to what they preach and “do their own research” when it comes to sharing crypto tips.

According to some digital asset attorneys, the general disclaimer “This is not financial advice” may not actually protect you from a legal standpoint.

U.S.-based Bracewell LLP securities attorney Matthew Nielsen told Cointelegraph that while it is “best practice” for influencers to disclose that “this is not financial advice,” it is simply “federal and It is not a word that protects them from the law as a “government agency,” he said. State securities laws strictly regulate who can provide investment advice. ”

Gadens partner Liam Hennessy, an Australian financial regulation attorney, explained that “advisory warnings” were “generally pretty useless,” while Michael Bacina, of Australian digital attorney Piper Alderman, said they were “ It’s not a magic word that is immune when uttered,” he added. responsibility. “

Cryptocurrency influencers and celebrity ambassadors are coming under increasing regulatory scrutiny, especially in the United States.

Nielsen cited the recent Kim Kardashian lawsuit as an example, where Kardashian was indicted by the SEC for failing to disclose the amount of money she received for promoting Ethereum Max to her followers.

influencer under pressure

Crypto influencer Mason Versluis, a.k.a. Crypto Mason, with over one million followers on Tik Tok, told Cointelegraph that his content “must not be taken as financial advice.” said he couldn’t.

Despite using a disclaimer that says, “This is not financial advice,” Versluis said, influencers “make financial moves according to what certain influencers say.” He said it’s important to keep that in mind.

He also notes that influencers “just interact with the marketing team” and typically don’t interact with “neither the developer nor the owner,” making it difficult to determine if a project falls into a “lag-pull” situation. emphasized how difficult

Australian crypto influencer Ivan Vantagiato, aka the Crypto Serpent, who has 68,000 followers on Tik Tok, says influencers should research crypto projects and exercise due diligence before running promotions. says.

Related: Australian cryptocurrency Finfluencer faces tough new legal restrictions

Hennessy believes the best way for crypto influencers to protect themselves is to help them determine “which tokens are securities and which are not.”

He went on to explain that it is important to understand that “derivatives are products that derive their value from something else,” and that advertising derivatives can lead to “criminal liability.” did.

Bacina, meanwhile, said influencers residing in Australia must be licensed to give financial advice and that “the disclaimer does not confer protection.”