Keeping Up With Crypto Asset Anti-Touting Laws – A Reminder From Kim Kardashian

For a mega-celebrity like Kim Kardashian, who endorses everything from "flat tummy" lollipops to laser hair removal systems, making a plug for a crypto token on her Instagram account may have been business as usual.

The U.S. Securities and Exchange Commission ("SEC"), however, had a different view that led to Kardashian reportedly paying US$1.26 million in penalties, disgorgement and pre-judgment interest in September. According to the SEC's press release of October 3, 2022, Kardashian was paid US$250,000 to promote crypto tokens offered and sold by EthereumMax ("Emax") to her 250 million followers on Instagram in June last year. The promotional post included a link to the Emax website that had instructions for investors to purchase Emax tokens. Kardashian did not disclose being paid for the promotion, which is a violation of Section 17(b) of the U.S. federal Securities Act of 1933. That section makes it unlawful for any person to tout a security