Why Kim Kardashian got fined and Matt Damon didn’t

Kim Kardashian was fined $1.26 million Monday for touting crypto schemes — even as much more high-profile pitches from the likes of Matt Damon and Larry David have gone unpunished. The seeming double standard is a function of a subtle yet crucial distinction in securities law.

Why it matters: Celebrity crypto endorsements drew millions of Americans into the crypto market at the beginning of this year, just before prices cratered.

  • The TV ads, which cost up to $6 million each, aired thousands of times and reached millions of viewers. Almost everybody who bought crypto at those levels ended up losing money.
  • A single post on Kardashian’s Instagram page, by contrast, for a coin almost no one had heard of, might have caused losses for anybody who bought that coin after seeing the ad. But the number of such people — and the total aggregate losses — were tiny in comparison to the industrial-scale ad campaigns from the big crypto platforms.

What they’re saying: Announcing the Kardashian settlement, SEC chair Gary Gensler attacked celebrity endorsements more generally:

“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.”

Between the lines: Gensler’s bluster notwithstanding, legally speaking, it’s fine for celebrities and influencers to endorse investment opportunities, including crypto investments. Where Kardashian crossed the line was when she endorsed a crypto asset security.

  • The height of the crypto advertising boom was the 2022 Super Bowl, where companies like FTX and Crypto.com spent untold millions touting their websites as a place to buy crypto — and, implicitly, to get rich doing so.
  • Kardashian’s relatively low-budget 2021 Instagram post, by contrast — she was paid just $250,000 for it — touted an actual coin, EthereumMax, that the SEC has determined qualifies as a security. That brings it under SEC jurisdiction, which is much stricter than the FTC regulations governing most advertising.

How it works: If you’re endorsing a company, the only rules that apply are the relatively lax ones from the FTC. If you’re shilling a security, then disclosing that you were paid — as Kardashian did with an #AD hashtag — is not enough; you also need to disclose how much you were paid.

The bottom line: If you’re going to tout crypto, tout a crypto company, not a coin.

Note: This article have been indexed to our site. We do not claim legitimacy, ownership or copyright of any of the content above. To see the article at original source Click Here

Related Posts
They said goodbye to one player, Serbian legionnaires want to return thumbnail

They said goodbye to one player, Serbian legionnaires want to return

13. jan 2022 o 16:00  I Platený obsah Olympia Bobrov chce zakončiť sezónu v prvej polovici tabuľky. Futbalisti Bobrova chcú po sezóne skončiť v prvej šestke. (Zdroj: Tomáš Ferenčík) V piatok 14. januára začne so zimnou prípravou siedmy celok IV. ligy Sever, ŠK Olympia Bobrov. „Jesennú časť sme mali turbulentnú. Mrzí nás, že všetky zápasy neboli…
Read More
17 killed, 59 injured by explosion in western Ghana thumbnail

17 killed, 59 injured by explosion in western Ghana

Map of Ghana, locating Apiate, some 300 km west of the capital Accra, where a truck carrying explosives collided with a motorcycle on Thursday, causing an immense explosion and a huge "loss of lives", according to the Ghanaian president.At least 17 people were killed and 59 injured Thursday in a devastating explosion in a western…
Read More
McDonald's employees had to play Nintendo DS during their training thumbnail

McDonald's employees had to play Nintendo DS during their training

Publiziert15. Januar 2022, 00:40Die Burgerkette setzte auf spielerisches Lernen. Das Trainingsspiel sollte nie an die breite Öffentlichkeit gelangen. Nun stellen es Fans gratis online.1 / 6Das extrem seltene Spiel «eSMART 2.0» ist aufgetaucht.Screenshot Youtube.com/Coddy TrentuitEs ist das Schulungsspiel für McDonald’s-Angestellte für den Nintendo DS.Screenshot Youtube.com/Coddy TrentuitDamit lernten Angestellte in Japan bis noch vor wenigen Jahren,…
Read More
Index Of News
Consider making some contribution to keep us going. We are donation based team who works to bring the best content to the readers. Every donation matters.
Donate Now

Subscription Form

Liking our Index Of News so far? Would you like to subscribe to receive news updates daily?

Total
0
Share