💰 Kim K's Krypto Koncern
Kim Kardashian is back in the headlines, though maybe for a reason she didn't expect. On Monday, the SEC charged the reality-TV-turned-social-media star with failing to disclose her own compensation from EthereumMax while promoting their EMAX tokens on social media last year. "This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto-asset securities, it doesn’t mean that those investment products are right for all investors," Gary Gensler, chair of the SEC, said in a press release. Kardashian, who was reportedly paid $250,000 to post about EMAX on her Instagram in June 2021, has agreed to settle with the market regulator for $1.26 million, and cooperate with their ongoing investigation.
"She wanted to get this matter behind her to avoid a protracted dispute," an attorney representing Kardashian in the matter said, notes the LA Times. "The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits."
"If you're advertising perfume, or you're advertising vacation homes, or anything else on the Internet, there are various laws related to that," Gensler told CNBC's Squawk Box. "But these are the securities laws, and [with] those other laws [it] might be appropriate to just say '#ad', but in the securities laws Congress put into place, you have to disclose not only that you're getting paid, but the amount [and] nature of it."
A flood of celeb endorsements for crypto-based assets hit the media during much of 2021 and seemed to reach its peak at this year's Super Bowl. Many of the celebrities making the endorsements failed to disclose their own involvement in the asset they were promoting (whether that was ownership of the asset or compensation). "Ms. Kardashian’s case also serves as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities," Gensler noted, writes The New York Times. Beyond crypto, celebrities also helped promote SPACs (or Special Purpose Acquisition Companies) during the market's gold rush in 2021.
We're not sure what version of the simulation is the one in which Kim Kardashian, the SEC, and crypto share a headline — but here it is. Yes, of course, you should not be getting your financial advice solely from reality TV and/or social media stars. Yes, those endorsements should come with a disclaimer about compensation. But can we also just stop and appreciate this krazy krypto k'moment?