The SEC is bullying Kim Kardashian, and it could chill the influencer economy

Authorities should have tried to work with Kardashian to establish more transparent standards for influencers rather than fining her 1.26 million dollars for promoting EthereumMax.

The Securities and Exchange Commission announced on October 3 that Kim Kardashian has settled an allegation that she promoted "a crypto asset security offered and sold by EthereumMax without disclosing the [$250,000] payment she received for the promotion". Despite cooperating and closing the case with $1.26 million in penalties, the prosecution highlights the liability that 'influencers' are increasingly facing due to a militant SEC that does not failed to establish regulatory clarity.

Addressing the agency's action against Kardashian, Jacob Robinson, legal scholar and host of the Law and Code podcast, noted that "the net positive is [that] it probably leads to less shilling by celebrities who have no knowledge of the underlying project and are just getting a big salary."

Through the proliferation of social media platforms, content creators and influencers have emerged and are working with brands to promote products and services. Unfortunately, the “creator economy” has also had its downsides. In particular, influencers have often sold products and services that may not serve everyone's interests, accepting payment from companies in return for their support.

While this privilege can be, and often is, abused, influencers do nothing consistently different from what companies do when they run paid ads in the media and on TV, or even when members of the Board of Directors join and accept a deposit to share their network and promote an organization. When a business places an ad in a major newspaper or magazine, such as The New York Times or Vogue, is the media also responsible for not disclosing their acceptance of payment to all readers? Clearly not, and the business model of the media would quickly collapse if they were...