Yahoo Finance's David Hollerith explains the SEC's charge against Kim Kardashian and what it means for celebrity endorsements of crypto.
AKIKO FUJITA: Now to a story a lot of people are talking about today. Last year during crypto's bull run, numerous celebrities increased the hype around digital assets by endorsing various crypto tokens on their social media platforms, which can have a major reach. Now crypto influencers are facing further backlash from US regulators.
Yahoo Finance's David Hollerith has the details. David, we didn't even say the biggest influencer. We're talking about Kim Kardashian, right? I mean, there's a lot of questions about whether, in fact, the SEC is trying to make an example out of her because if you look at that post that's in question, she did clearly mark it as an ad.
DAVID HOLLERITH: Akiko, exactly. I mean, Kim Kardashian, just by her Instagram influence, she's something like the ninth to seventh most influential Instagram account in the world. On top of that, too, she's rated as having by Inves, which is sort of an investor tooling website, she's rated to have the highest net worth celebrity associated business, SKIMS. So, you know, she has an enormous presence in this regard.
And the ad in question is this Ethereum Max token endorsement, which came in June of last year. And, you know, what we saw there is Kim basically said this is not financial advice, but sharing what my friends just told me about the Ethereum Max token.
She also included a hashtag #ad to the post, which sort of seems like a disclosure, but nonetheless, the SEC's division director of enforcement has said that in the statement today-- it released today that Kardashian's disclosure did not include the sum she received for payment. So I think that is clearly the pivoting point here, is that celebrities need to disclose upfront how much they're paid for an endorsement, and obviously, whether or not they're paid for an endorsement.
AKIKO FUJITA: Well, so that's an interesting point because, David, if we pull up that post again that's in question, I mean, that's not how social media really works, right? I mean, I'm thinking about what a lot of these influencers write about crypto, and then you'd have to have a disclosure about how much you got paid, in addition to labeling it as an ad. I mean, how does this settlement, you think, change or actually affect influencers' role in this space if these are the requirements that are necessary?
DAVID HOLLERITH: Yeah, I mean, I guess a quick assessment is Kardashian is banned for three years. And, you know, I think if you just look at the crypto market in general, there might be a lot less hype for the next year to two years. So that kind of rhymes to me. But going into this, I mean, it's clear that there were a lot more celebrity endorsements last year. So, you know, I think it's reasonable to assume that there would be more settlements that come between celebrities and the SEC this year.
That being said, I think it does seem like if there is some sort of ground that can be struck in which it makes that-- I mean, it makes the posts less interesting, but they can-- if there can be sufficient disclosures here, I still think that celebrities still might try and get involved in crypto, so.
AKIKO FUJITA: Yeah, I'd be curious to see, because we did see a surge in interest after her post, whether, in fact, that would stay the same, even with those disclosures in place. But we'll continue to watch that. As always, David Hollerith, thanks so much for that.