Kim Kardashian’s Ethereum Max ad violated the SEC’s anti-touting provision

Kim Kardashian disclosed that she was paid for promoting Ethereum Max — but didn’t tell her followers the exact amount. The SEC did the right thing when it fined her for that oversight.

In June 2021, Kim Kardashian published an Instagram story informing her approximately 330 million Instagram followers about the EthereumMax (EMAX) crypto token. The Securities and Exchange Commission (SEC) charged Kardashian, claiming she violated the anti-touting provision of the Securities Act when she failed to disclose she received $250,000 in exchange for her promotion of the unregistered security.

The charges incited a public debate — is the requirement to disclose the amount paid to promote an investment opportunity important?

What’s new? Celebrities and social media influencers have long enjoyed a lucrative revenue stream in promoting and endorsing services and products ranging from clothing to beauty products, and even supplements and medications. The Federal Trade Commission (FTC) regulates endorsements by requiring various acts and disclosures, including whether a financial relationship exists between the endorser and the company, whether a post was paid for and even by requiring an endorser to personally try a product before endorsing it. Still, the FTC does not go so far as to require endorsers to disclose the amount they were paid to promote a product.

So, what’s different here? This time, the “product” is an investment opportunity falling under the watchful eye of the SEC. As is required by the FTC’s Endorsement and Testimonial Guidelines, Kardashian made sure to include disclaimers such as “#Ad” and eve