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16 Ohio St. Bus. L.J. 279 (2021-2022)
#NotFinancialAdvice: Empowering the Federal Trade Commission to Regulate Cryptocurrency Social Media Influencers

handle is hein.journals/eblwj16 and id is 291 raw text is: #NOTFINANCIALADVICE: EMPOWERING THE FEDERAL TRADE COMMISSION TO REGULATE CRYPTOCURRENCY SOCIAL MEDIA INFLUENCERS TIMOTHY M. BARRY Abstract: The proliferation of digital currency has only accelerated due to the retail investor revolution at the advent of COVID-19.1 This year alone, the number of available cryptocurrency coins has nearly doubled to 10,000.2 The massive influx of interested investors within the nascent cryptocurrency space has inspired bad actors to take advantage of people's goodwill. Specifically, social media influencers are using their sway to convince their fans to invest in crypto coins that they own. Thus, when their fans purchase the coin, the value of the cryptocurrency increases, and the influencers can sell for a profit. Further, in certain circumstances, creators of digital coins provide these influencers a large percentage of these coins within the pre-sale as payment for their endorsement. Various regulatory agencies are in dispute as to the classification of cryptocurrency. Also, no applicable statutes or regulations specifically regulate these influencers. Therefore, content creators can act with impunity. This work examines the cryptocurrency market and the current regulatory patchwork developed by the various relevant federal agencies. Moreover, it proposes a temporary solution to prevent social media influencers from maliciously benefiting at the expense of their followers. The Security Exchange Commission (SEC) and Commodity Futures Trade Commission (CFTC) are currently jockeying to be the agency that regulates the cryptocurrency space. However, the Federal Trade Commission (FTC) should oversee social media influencer endorsements of digital currencies. Thus, this Note proposes that the FTC expand its disclosure rules' purview to require social media influencers to disclose if they have received payment for their endorsement of a cryptocurrency. This change would allow consumers to know social media influencers' stake in an endorsement. Additionally, knowing they would need to disclose this information may have a chilling effect on influencers endorsing risky or potentially malicious alternative cryptocurrency coins. 'Bianca Britton, Inside the Wild West of Cryptocurrencies and Social Media Influencers, NBC NEWS: TECH NEWs, (July 21, 2021, 5:00 AM), https://www.nbcnews.com/tech/tech-news/wild-west-cryptocurrencies-social- media-influencers-rcnal469 [https://perma.cc/AZ5V-TRTJ]. 21d.