Powered By:

Path 18@2x

On October 3, 2022, the Securities and Exchange Commission (SEC) entered a settled Order against Kim Kardashian charging her for promoting EthereumMax and its EMAX tokens to the public on Instagram without disclosing her compensation.

Earlier this year Kardashian posted several Instagram stories about EMAX. The posts included a link to the EthereumMax website, which instructed viewers on how to invest in EMAX tokens. However, Kardashian did not disclose that the company had paid her $250,000 for her posts. Under the terms of the SEC’s Order, Kardashian agreed not to promote crypto assets for three years and to pay a total of $1.26 million in disgorgement and penalties.

Did anyone think Kardashian was not being paid? In case there was any confusion, each post said “#AD” at the bottom. However, as SEC Chair Gary Gensler said in an interview touting the settlement, more is required under the federal securities laws. Kardashian was supposed to disclose how much she was being paid. Maybe it slipped her mind? It may be a lot for me or you, but for Ms. K, the amount at issue seems like lunch money. Here at SKrypto we can only speculate.


The SEC tends to choose cases it believes will get attention and thereby serve as a warning to others not to make the same mistake. By this measure, the SEC’s action against Kardashian has been an enormous success. In 2018, the SEC entered into similar settlements with DJ Khaled and professional boxer Floyd Mayweather Jr. for failing to disclose payments they received for promoting ICOs.

Section 17(b) of the Securities Act, often referred to as the “anti-touting” rule, requires those who promote securities for an issuer, underwriter, or dealer to disclose the nature and amount of the consideration received for such promotions. For the SEC to have jurisdiction they must find the EMAX tokens were securities and the Order takes us through a basic Howey analysis.

The same day the SEC announced the action against Kardashian, it released a YouTube video warning investors to use caution when listening to celebrity endorsements for investments. Keep up with the SEC and watch the video here.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm or its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.


Fill out the following form to receive our cryptocurrency news and analysis.

Author's Assets


Philip Moustakis | COUNSEL

A former senior counsel in the SEC’s Division of Enforcement, Philip advises companies and individuals at Seward & Kissel on cryptocurrencies and blockchain technology, SEC enforcement matters, other regulatory investigations, and internal investigations. As a founding member of the SEC’s Cyber Unit, Philip advised the Commission on cryptocurrencies and investigated matters involving initial coin offerings (ICOs), unlawful touting of ICOs, and other violations of the federal securities laws related to cryptocurrencies. Publicly filed enforcement matters Philip spearheaded included the SEC’s first ever Bitcoin-related enforcement action against the operator of Bitcoin Savings & Trust, a Bitcoin-denominated Ponzi scheme, settled proceedings against an operator of a Bitcoin-related social media marketing venture and a popular Bitcoin betting site for the offer and sale of unregistered securities, and settled proceedings against an operator of unregistered cryptocurrency-denominated securities exchanges and broker-dealers.

“The case is not much of a surprise. After all, the SEC has signaled that it intends to pursue investigations or actions against crypto-exchanges.

Unless and until the SEC provides further guidance and a path to compliance for token issuers, crypto lending products, exchanges, and other market participants, the question of whether any particular crypto asset or transaction is a security will be litigated one at a time.”

Philip’s thoughts on the recent class-action suit brought against the crypto exchange Coinbase, as published in a Coinspeaker article titled, “Coinbase Served Lawsuit Over Sale of ‘Unlicensed’ Crypto Assets."

Group 16-1

Grace Dahlstrom | LAW CLERK

Grace Dahlstrom is a Law Clerk in the Business Transactions Group.  Grace received a B.A., cum laude, from Scripps College and a J.D. from the University of California, Berkeley, School of Law.