Social media and reality TV celebrity Kim Kardashian’s fine for promoting cryptocurrency ethereumMax (EMAX) was a “gift” to the Securities and Exchange Commission (SEC), said Lisa Braganca, former enforcement branch chief at the U.S. agency.
“The SEC is always looking for a way to get the message out to the public, and when somebody with the kind of following that Kim Kardashian has makes a blunder like this … that’s a layup for the SEC,” Braganca said on CoinDesk TV’s “First Mover” Tuesday.
Earlier this week, the “Keeping Up With the Kardashians” star was ordered to pay a $1.26 million fine in settling charges filed by the SEC. The agency said she not only promoted EMAX to her millions of social media followers but didn't disclose the $250,000 payment she received for that promoting. In the settlement, where she did not admit wrongdoing, she agreed to cooperate with the SEC's ongoing investigation and not promote crypto assets for three years.
“The chairman [Gary Gensler] is absolutely right to say there is a specific statute that addresses and requires that there be disclosure, not just of a paid promotion, but the amount that someone either has been paid or expects to be paid,” said Braganca, who now runs her own firm, Braganca Law.
“[T]hat's where [Kardashian] blew it,” she added, referring to the “#AD” tag placed at the bottom of Kardashian’s Instagram post. “It was pretty misleading.”
And while it “may seem strange” that the SEC is going after Kardashian, it could be a reminder that even celebrities aren’t immune to government authority, according to Braganca.
Read more: Kim Kardashian and EthereumMax. Why? / Opinion
The Kardashian token-tout debacle isn’t the first time the SEC has gone after celebrities promoting crypto as investments, she noted. In 2018, boxer Floyd Mayweather Jr. faced similar litigation after he promoted EMAX.
Now, however, the SEC could be showing “greater levels of irritation,” and is in search of “bigger penalties,” Braganca said.
As to why the SEC hasn’t gone after more token issuers, Braganca said the agency “doesn’t have to go after everyone,” and could just be going after “the low-hanging fruit.”
What the SEC is saying is it can have a big impact on the token issuers if it goes “after the influencers, and then we’ll get to the issuers eventually,” Braganca said.
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