More On: Kim Kardashian
Kim Kardashian settles with the SEC over her promotion of cryptocurrency and will pay a fine of $1.26 million
Kim Kardashian's plans to become a lawyer could be in danger because of the SEC 'pump and dump' scandal
Experts tell The Post that Kim Kardashian's $1.26 million fine from the Securities and Exchange Commission could be the first shot in a larger regulatory volley against celebrities who sell cryptocurrency.
A-listers like Matt Damon, Tom Brady, and Larry David, who were in ads for cryptocurrency exchanges during this year's Super Bowl, as well as stars like Mike Tyson and Reese Witherspoon, who took part in "NFT drops," could lose their jobs if the SEC cracks down on cryptocurrencies.
John Coffee, a professor of law at Columbia and an expert on securities, told The Post, "This is a legal strategy to go after public figures. Now everyone in Hollywood will take notice." "[SEC Chair] Gary Gensler doesn't worry about being in the news."
Celebrities have been selling things on QVC and informercials for a long time, long before Instagram or cryptocurrencies. But lawyers warn that selling financial products is much more difficult than selling skin care or clothing.
Former SEC enforcement attorney Ron Geffner told The Post that the Kardashian news is just the "tip of the iceberg" because celebrities aren't thinking about how securities laws might apply to cryptocurrencies.
Geffner said, "When it comes to securities and the laws that govern them, there are far more far-reaching effects for celebrities and influential people than in other industries."
Experts said that Kardashian's obvious promotion of a single crypto token was easy for regulators to catch. Garrick Hileman, a crypto expert and visiting fellow at the London School of Economics, says that celebrities who promoted sites like Crypto.com and FTX, where customers can trade a wide range of cryptocurrencies, could also be targets.
Hileman said that using celebrities to promote exchanges made him wonder if that was the next step.
Gensler has said that many cryptocurrencies are "unregistered securities," and Hileman said that the SEC could think that celebrities who promote sites for trading digital coins are breaking securities laws if they do so.
He also said that David, Damon, and Brady should be "worried" about what happened with the Kardashians.
"If you get in the SEC's crosshairs, your reputation will take a hit," he said.
A law professor at George Washington University named Lawrence Cunningham asked the SEC to do more to go after celebrities who promote cryptocurrencies.
"Manipulative schemes pose the biggest risk to average American investors," Cunningham told The Post. "The SEC's main job under the law is to reduce those risks by going after fraudsters." "Picking one celebrity as a showpiece and focusing on the fact that she didn't report her payments doesn't show a strong enforcement program."
When asked for comments, representatives for Witherspoon, Damon, David, and Tyson did not respond right away.
Insiders pointed to a strange thing that happened with actress Charlize Theron at a cryptocurrency conference last Thursday as a sign that celebrities might not be as interested in getting involved with cryptocurrencies as they once were.
Theron and Circle's global head of policy, Dante Disparte, took part in a question-and-answer session at the Converge22 conference in San Francisco. Even though Theron was talking to the CEO of a crypto company at a crypto conference, the Q&A had nothing to do with cryptocurrencies or the blockchain. Instead, it was all about Theron's life and charity work.
The conversation made the crypto fans in the room scratch their heads.
Hileman, who went to the conference, said, "I have to wonder if her lawyers told her, 'We can't talk crypto.'"
Theron didn't answer when asked for her opinion.
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