The U.S. Securities and Exchange Commission  announced on October 3, 2022 that it brought charges against Kim Kardashian for touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion.  The following are based on the SEC Order,

On June 13, 2021, Kardashian promoted EthereumMax with a post on her Instagram account.  She received approximately $250,000 for the post. At the time of her promotion, Kardashian had approximately 225 million Instagram followers.  Kardashian did not disclose that she had been paid by EthereumMax or the amount of compensation she received from EthereumMax for making this post.

EthereumMax tokens (EMAX) qualified as securities for the following reasons.  EthereumMax frequently touted the token’s rise in price on its social media pages as it offered and sold EMAX tokens.  Based on EthereumMax’s public statements, purchasers of the EMAX tokens would have had a reasonable expectation that EthereumMax and its agents would expend significant efforts to develop the EthereumMax platform, which would increase the value of their EMAX tokens, resulting in investor profit. EthereumMax’s marketing materials highlighted that the Company and its agents would ensure a secondary trading market for EMAX tokens by creating a trading market for EMAX tokens. EthereumMax’s marketing materials also emphasized the purported expertise of the Company’s management.  EthereumMax’s marketing materials, moreover, contained numerous direct statements that the EMAX tokens would rise in value as a result of the efforts of the Company and its agents, including by touting future deals and relationships that would “drive value.”

Kardashian’s crypto asset security promotion occurred after the Commission warned in its July 25, 2017, DAO Report of Investigation that digital tokens or coins offered and sold may be securities, and those who offer and sell securities in the United States must comply with the federal securities laws.  The promotion also occurred nearly four years after the Commission’s Division of Enforcement and Office of Compliance Inspections and Examinations issued a statement reminding market participants that “[a]ny celebrity or other individual who promotes a virtual token or coin that is a security must disclose the nature, scope, and amount of compensation received in exchange for the promotion. A failure to disclose this information is a violation of the anti-touting provisions of the federal securities laws.”

The SEC found that Kardashian violated the anti-touting provision of the federal securities laws by failing to disclose that she was being compensated. Without admitting or denying the SEC’s findings, Kardashian agreed to disgorge the $250,000 she was paid (plus interest) and to pay a $1 million fine.


David Zaslowsky has a degree in computer science and, before going to Yale Law School, was a computer programmer. His practice focuses on international litigation and arbitration. He has been involved in cases in trial and appellate courts across the United States and before arbitral institutions around the world. Many of David’s cases, including some patent cases, have related to technology. David has been included in Chambers for his expertise in international arbitration. He is the editor of the firm's blockchain blog.