Post by dividavi on Oct 6, 2022 2:37:29 GMT
Immense News - Famous celebrity Kim Kardashian reached a $1.26 million crypto-related settlement yesterday with the S.E.C. What do you think? Is this some publicity stunt by the S.E.C.?
www.nytimes.com/2022/10/04/business/dealbook/kardashian-crypto-sec-gensler-ethereummax.html
Keeping Up With the Crypto Influencers
Also, a group of regulators put together after the financial crisis weighs on how risky digital currencies are to the economy.
By Andrew Ross Sorkin, Bernhard Warner, Vivian Giang, Sarah Kessler, Stephen Gandel, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni
Oct. 4, 2022
The Kardashian rule for crypto promoters.Credit...Patrick T. Fallon/Agence France-Presse — Getty Images
What did Kim do wrong?
Kim Kardashian’s $1.26 million crypto-related settlement yesterday with the S.E.C. was designed to get maximum exposure. Instead of just a dry press release, though the agency released one of those, Chair Gary Gensler announced the settlement on social media and even posted an influencer-style video warning the public about crypto investment schemes and scams. One of the many questions raised by the settlement that Gensler didn’t address in the video: Was it fair?
The case wasn’t as clear-cut as the S.E.C. made it seem. Kardashian got into trouble for sharing a promotional message about EthereumMax, an obscure crypto token, with her more than 330 million followers on Instagram. But it wasn’t as if Kardashian was overtly trying to flout the law. She included in the post a disclaimer that she was not offering financial advice, as well as the hashtag #AD, an F.T.C.-endorsed indication that the post was a paid advertisement. The S.E.C. said that disclosure didn’t comply with a decades-old agency rule governing the promotion of investment opportunities. Kardashian’s big mistake: She left out when and how much she was paid — $250,000 — to promote the token.
Erik Gordon, a professor at the University of Michigan’s Ross School of Business, says the Kardashian cachet no doubt had a lot to do with the S.E.C.’s decision to go after her. “Part of what you do as a regulator is to punish the person, but what you are also doing is bringing cases that will have the overall effect of scaring people away from doing the same thing,” Gordon told DealBook.
The settlement raises issues for other crypto endorsements. Crypto companies spent millions last year on ads during the Super Bowl, many of them featuring celebrities, including Matt Damon and Tom Brady. Could those ads lead to S.E.C. investigations? The S.E.C. declined to comment on whether it was pursuing cases against other celebrities.
The S.E.C. says it targeted Kardashian because she illegally promoted a specific security. Damon and Brady, on the other hand, may be off the hook because they’ve endorsed exchanges on which you can trade crypto, not individual investments. But yesterday’s enforcement muddies the picture. Apparently the S.E.C. is sending the message that promoting something like EthereumMax, which we now know it defines as a security, requires a heightened level of disclosure. But then what about Michael Saylor and Elon Musk, two prominent promoters of Bitcoin and Dogecoin, respectively? Wouldn’t the Kardashian rule apply to them, too?
Going after Kardashian has generated plenty of questions. Thousands of commenters, for example, flocked to Gensler’s Twitter post about the settlement to criticize him for the agency’s scattershot enforcement approach to crypto promotions and promoters.
All the attention was like rocket fuel for EthereumMax. The token has risen more than 12-fold in the past 24 hours, to trade at a near six-month high. Zoom back though, and it’s down more than 90 percent from the time of the infamous Kardashian EthereumMax Instagram post.
www.nytimes.com/2022/10/04/business/dealbook/kardashian-crypto-sec-gensler-ethereummax.html
Keeping Up With the Crypto Influencers
Also, a group of regulators put together after the financial crisis weighs on how risky digital currencies are to the economy.
By Andrew Ross Sorkin, Bernhard Warner, Vivian Giang, Sarah Kessler, Stephen Gandel, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni
Oct. 4, 2022
The Kardashian rule for crypto promoters.Credit...Patrick T. Fallon/Agence France-Presse — Getty Images
What did Kim do wrong?
Kim Kardashian’s $1.26 million crypto-related settlement yesterday with the S.E.C. was designed to get maximum exposure. Instead of just a dry press release, though the agency released one of those, Chair Gary Gensler announced the settlement on social media and even posted an influencer-style video warning the public about crypto investment schemes and scams. One of the many questions raised by the settlement that Gensler didn’t address in the video: Was it fair?
The case wasn’t as clear-cut as the S.E.C. made it seem. Kardashian got into trouble for sharing a promotional message about EthereumMax, an obscure crypto token, with her more than 330 million followers on Instagram. But it wasn’t as if Kardashian was overtly trying to flout the law. She included in the post a disclaimer that she was not offering financial advice, as well as the hashtag #AD, an F.T.C.-endorsed indication that the post was a paid advertisement. The S.E.C. said that disclosure didn’t comply with a decades-old agency rule governing the promotion of investment opportunities. Kardashian’s big mistake: She left out when and how much she was paid — $250,000 — to promote the token.
Erik Gordon, a professor at the University of Michigan’s Ross School of Business, says the Kardashian cachet no doubt had a lot to do with the S.E.C.’s decision to go after her. “Part of what you do as a regulator is to punish the person, but what you are also doing is bringing cases that will have the overall effect of scaring people away from doing the same thing,” Gordon told DealBook.
The settlement raises issues for other crypto endorsements. Crypto companies spent millions last year on ads during the Super Bowl, many of them featuring celebrities, including Matt Damon and Tom Brady. Could those ads lead to S.E.C. investigations? The S.E.C. declined to comment on whether it was pursuing cases against other celebrities.
The S.E.C. says it targeted Kardashian because she illegally promoted a specific security. Damon and Brady, on the other hand, may be off the hook because they’ve endorsed exchanges on which you can trade crypto, not individual investments. But yesterday’s enforcement muddies the picture. Apparently the S.E.C. is sending the message that promoting something like EthereumMax, which we now know it defines as a security, requires a heightened level of disclosure. But then what about Michael Saylor and Elon Musk, two prominent promoters of Bitcoin and Dogecoin, respectively? Wouldn’t the Kardashian rule apply to them, too?
Going after Kardashian has generated plenty of questions. Thousands of commenters, for example, flocked to Gensler’s Twitter post about the settlement to criticize him for the agency’s scattershot enforcement approach to crypto promotions and promoters.
All the attention was like rocket fuel for EthereumMax. The token has risen more than 12-fold in the past 24 hours, to trade at a near six-month high. Zoom back though, and it’s down more than 90 percent from the time of the infamous Kardashian EthereumMax Instagram post.
