VanEck to pay fine of over 200 million yen for not disclosing use of influencers to promote ETFs

9 months ago 53

Van Eck fined for ETF “BUZZ”

On the 16th, the U.S. Securities and Exchange Commission (SEC) fined VanEck, an asset management company, approximately 260 million yen ($1.75 million) for failing to disclose the role of influencers when launching a new ETF. He announced that he agreed.

This is related to the VanEck Social Sentiment ETF (ticker symbol BUZZ).

BUZZ tracks the 75 large-cap U.S. stocks with the most positive investor sentiment and bullish perceptions, based on content collected from online sources such as social media, news, and blogs.

It is based on the BUZZ NextGen AI U.S. Sentiment Leaders Index (BUZZTR), provided by Canadian company BUZZ Holdings.

Currently, BUZZ's portfolio also includes crypto-related companies such as Coinbase (COIN), PayPal (PYPL), Tesla (TSLA), and MicroStrategy (MSTR).

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Influencer appointment not disclosed

The SEC noted that the provider of the BUZZTR index had informed VanEck that it planned to hire influencers to promote the index upon its launch.

Additionally, in order to encourage marketing and promotion by influencers, index license fees were subject to a variable system in which the index provider's remuneration increased in relation to the size of the fund.

According to the SEC, VanEck failed to disclose the influencers' involvement in advertising and the sliding fee structure to the fund's independent trustees when the ETF was approved.

The SEC did not name the specific influencer, but Dave Portnoy, who runs the popular digital sports media site Barstool Sports and is also known as a trader, was used to promote the virus.

Andrew Dean, head of the SEC's Enforcement Division, said VanEck's failure to disclose “limited the Board's ability to consider the economic impact of licensing agreements and influencer engagement.” It has said.

VanEck agreed to the cease and desist order and fine without admitting or denying the SEC's findings.

VanEck just started offering a Bitcoin (BTC) spot ETF in January. The company has also applied to list an Ethereum (ETH) spot ETF, and the SEC's final decision deadline is May 23.

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What is Bitcoin ETF?

An Exchange Traded Fund that includes Bitcoin as an investment. An investment trust is a financial product that collects money from investors into a single fund and invests it in stocks, bonds, etc. The system is such that the investment results are distributed according to each investor's investment amount. Among investment trusts, ETFs are listed on stock exchanges, so they can be bought and sold like stocks.

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