What does shill mean in crypto?

Shill meaning in crypto is promoting a coin for your own benefit, usually by hyping it on social media. Shills often present themselves as independent fans or educators while being paid, or while holding tokens they hope to sell at a higher price.

What does shill mean in slang?

The word is older than crypto. Merriam-Webster defines a shill as a decoy for a pitchman or gambler, or someone who makes a sales pitch or acts as a promoter. It dates the verb to about 1914 and the noun to about 1916, and says the word may be a shortened form of the older term shillaber, whose origin is unknown.

What does shill mean in crypto?

BabyPips defines shilling as promoting bitcoin or an altcoin for your own benefit, often without being open about being paid. Payment can be a flat fee or something indirect, such as discounted presale tokens. KuCoin describes it as a form of indirect advertising, often by an influencer, aimed at raising demand and the token's price.

BabyPips notes a common pattern. After building hype, a shill may sell much of their holdings at the higher price, which can push the price down and leave later buyers with losses. This is the core of a pump and dump.

What does shill mean in meme coins?

Meme coins rely heavily on attention, so shilling is a big part of how they spread. Holders post about a coin in chats and replies to draw in new buyers, and projects sometimes pay influencers to do the same. KuCoin warns that shilling is often used to promote projects that turn out to be scams, including rug pulls.

Is paid crypto promotion legal?

It depends on disclosure and on what is being promoted. In the US, Section 17(b) of the Securities Act of 1933, the anti-touting provision, makes it unlawful to promote a security for pay from the issuer without disclosing the payment and its amount, according to Baker McKenzie. In a November 2017 statement, the SEC said this can apply to celebrities promoting tokens that are securities.

In October 2022 the SEC announced that Kim Kardashian agreed to pay $1.26 million to settle charges that she promoted the EMAX token on Instagram without disclosing a $250,000 payment. Baker McKenzie notes that in March 2023 the SEC also charged several other celebrities over undisclosed paid promotion of crypto tokens.

Separately, the FTC says influencers must make clear any material connection to a brand, including payment or free products.

These are US rules and other countries have their own. The neutral takeaway is that a glowing post about a coin may be advertising, and the DYOR principle applies to every promotion.