Unless you’ve somehow managed to avoid matching with a crypto fiend on Hinge recently, you’ve probably heard about Kim Kardashian’s recent SEC charges. In case you need a recap, here’s what went down: Kim Kardashian agreed to pay a $1.26 million fine to the SEC for failing to disclose that EthereumMax paid her $250k to promote the coin—which the SEC deems a crypto asset security—on Instagram.
Kardashian’s settlement could cause marketers working on crypto-related brands or campaigns to be more buttoned-up when working with influencers. Brad Michelson, eToro’s head of US marketing, told MarketingDive that Kardashian’s SEC settlement was a “wake-up call” for both marketers and influencers. “What we’re learning more and more as marketers in this industry is that you have to be even more careful than other industries when working with influencers, making sure all the t’s are crossed, and i’s are dotted when it comes to regulations,” Michelson said.
It’s not just influencer contracts that need to be watertight—marketers also need to be clear about what disclosures are needed in social posts and digital ads, according to Aaron Frank, VP of marketing at BlockFi. “I think a lot of marketers will now either work with their legal teams or outside counsel a little bit closer just to make sure that they’re crossing all their T’s and dotting all their I’s when it comes from a compliance perspective, just because the space is so new,” Frank said.
Unlike other asset classes, there are very few guardrails in place for cryptocurrency when it comes to marketing and advertising. For now, the onus is on marketers themselves to educate themselves on best practices and consult with compliance experts when in doubt. Unfortunately, that means we can probably expect more high-profile mistakes—and settlements—in the months ahead.
The bottom line is that Kim Kardashian’s SEC settlement is a wakeup call for both marketers and influencers who are involved in cryptocurrency-related brands or campaigns. Marketers need to be clear about what disclosures are needed in social posts and digital ads, and they should consult with compliance experts when in doubt. Influencers also need to be aware of the potential legal consequences of promoting cryptocurrencies on social media.