After the collapse of FTX, which was once the biggest crypto exchange in the world and now is nothing, several crypto regulators and security agencies made their policies strict over the whole crypto industry, and since then, they have started investigating other crypto firms. According to a Bloomberg report, today, on the 5th of December, another agency FTC, the US Federal Trade Commission, joined this list and is investigating several unnamed crypto firms over misleading crypto advertising.
According to the report, in a statement, Juliana Gruenwald Henderson, a spokesperson of the FTC, said that we are investigating several firms for possible misconduct concerning digital assets. However, Juliana did not share further information about which firms are the subject of this investigation. Moreover, she also did not share any information regarding the reason behind launching these investigations.
According to the official website of FTC, when consumers see or hear an advertisement, whether it’s on the Internet, television, radio, or anywhere else, federal law says that the ad must be truthful and deceptive, or misleading. And when appropriate, the ad must be backed by scientific evidence. Moreover, federal law requires truth in advertising, such as rules that individuals disclose when they have been paid for reviews or endorsements.
According to a report from Decrypt, a spokesperson of the FTC said that while we can’t comment on current events in the crypto markets or the details of any ongoing investigations, we are investigating several crypto firms for possible misconduct involving digital assets.
After this announcement, FTC joined the US Securities and Exchange Commission, which already has been doing this job. SEC made regulations for disclosures that individuals must make when promoting securities. In October, the agency used these rules to crack down on celebrities involved in the promotion of the EthereumMax token, EMAX, and announced charges against Kim Kardashian.
According to the SEC, Kim failed to disclose a payment of $250,000 she received for publishing an Instagram post, which delivered instructions for potential investors to buy EMAX tokens. However, she agreed to pay $1.26 million to settle the charges.