Barry Silbert, founder of Digital Currency Group and Bitcoin Investment Trust, may find himself in trouble with US financial police due to his latest tweets with respect to Ethereum Classic (ETC).
Two securities lawyers told Reuters they believed that some of Silbert’s social media postings about the price of ethereum classic could draw the attention of U.S. regulators, according to a recent report.
Silbert has been a big backer for the digital coin, which grew in value more than 90 times in 2017, before falling back within a broader selloff across the cryptocurrency markets.
Barry’s successful bet on Ethereum Classic prompted some of these detractors to decry his postings on price and attempt to divert enthusiasm for the new coin because it raises concerns over possible price manipulation. They pointed out to some samples of Silbert’s tweets that they claim promote ETC as a viable alternative to Ethereum.
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Some critics feel that Silbert is orchestrating a classic pump and dump by using his name and connections to trigger bullish sentiment about ETC. A very glaring example is a ‘pro tip’ he published in November, where he advised an investor to “close out his short position before an Ethereum Classic Summit”. The summit was organized by DCG in Hong Kong.
Commenting on this point, DCG spokesperson confirmed to Finance Magnates that DCG has sold zero ETC tokens to date.
Just as mainstream investors have come to rely on Twitter feeds in place of traditional wire services, crypto traders and ICO participants are now prone to moving on a headline glimpsed on social media.
The alleged manipulation efforts were not limited to social media, as news reports claimed earlier that CoinDesk’s coverage has changed since Silbert’s DCG acquired the cryptocurrency news site. However, the DCG spokesperson stated that CoinDesk maintains complete editorial independence and that his company does not in any way influence CoinDesk’s published content.
Silbert also told Reuters last month that he was “highly, highly sensitive” to the rules that govern financial markets and that he and his company are “subject to anti-fraud provisions and insider trading and … all those types of things.”
Silbert stated that he would never make a recommendation or give price predictions. He added: “DCG, its subsidiaries and employees take pride in our strict compliance policies and adherence to all applicable regulations, including company-wide rules and restrictions concerning the trading of digital assets.”