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After Kim Kardashian’s SEC settlement, influencers working with brands could face more scrutiny – and fines



After Kim Kardashian’s SEC settlement, influencers working with brands could face more scrutiny – and fines

After the U.S. Securities and Exchange Commission fined long-time, and billionaire, influencer Kim Kardashian for failing to disclose an Instagram endorsement paid for by a crypto company, some think the broader influencer sector could face more scrutiny.

On Monday, the SEC announced it had reached a $1 million settlement with Kardashian over her 2021 post promoting the crypto asset EthereumMAX. Although the post mentioned the often used “#Ad,” the agency said Kardashian should have also included that she was paid $250,000 for the post. As part of the settlement, Kardashian has agreed to also not promote any cryptocurrency for three years, according to the SEC, and will also be required to pay an additional $260,000 in disgorgement.

“The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source and amount of compensation they received in exchange for the promotion,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a statement about the settlement. “Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”

Although the fine is a drop in the bucket for Kardashian, it also opens new questions about whether federal regulators are more willing to go after social media influencers and celebrities alike.

Over the past few years, several celebrities have settled with the SEC after promoting cryptocurrencies without proper disclosures. In 2018, the agency settled with boxer Floyd Mayweather Jr. and music producer DJ Khaled after they failed to disclose their payments related to promoting Centra Tech, a company that was charged by the SEC with deceiving investors out of tens of millions of dollars as part of a proposal to create a virtual currency debit card. In 2020, actor Steven Seagal settled with the agency over failing to disclose payments from B2G.

Alexandra Roberts, a law and media professor at Northeastern University, said professional influencers like Kardashian know not to skip disclosures and should be penalized when they don’t. However, when it comes to micro-influencers, it should be the responsibility of the company hiring them to make sure they’re educated and that disclosures are in place.

“It’s a reminder to brands that there are rules and there will be scrutiny,” Roberts said. “And also a reminder to the general public that when you see people shilling these investment opportunities or brand that they’re talking about that you should think of them like you would think about traditional TV ads.”

In 2016, the group Truth In Advertising (TINA) released a report that found more than 100 instances where Kardashian and her celebrity sisters didn’t follow the FTC’s endorsement guidelines. More recently, TINA has investigated beyond the Kardashians. In August, the organization released a report claiming that more than a dozen celebrities have promoted NFTs on social media without properly disclosing their relationships with various companies and projects.

Laura Smith, TINA’s legal director, said it’s frustrating to see celebrities “continue to flout the law,” but also encouraging to see the SEC taking the issue of undisclosed promotion seriously.

“Deceptive marketing sells,” said Smith, adding that “until there are costs with deceptive marketing… if it’s still profitable, it will continue.”

Kardashian and Mayweather are also co-defendants in a class action lawsuit filed in January, which claims they—along with former Boston Celtics player Paul Pierce—promoted EMAX as part of a “pump-and-dump scam.”

“We see the SEC order as validation of the claims in the EthereumMax litigation, particularly those against Defendant Kardashian,” John Jasnoch, an attorney with Scott + Scott LLP, which is representing the plaintiffs in the lawsuit, in an email to Digiday. “Promotors who mislead investors should be held accountable.”

The fines come as another U.S. agency, the Federal Trade Commission, is considering updates to regulations for endorsements and testimonials related to products and services. (The FTC — which last updated its guide in 2009 before the rise of the influencer industry — had begun proposing chances in February 2020 but then paused during the pandemic.)

Some trade groups including the Association of National Advertisers and the Interactive Advertising Bureau say the FTC’s plans go too far. Others, such as the American Association of Advertising Agencies (the 4As), say they’re more in line with the proposals.

Lartease Tiffith, the IAB’s EVP for public policy, said that the trade groups have issues with how the FTC’s plans to require influencers to have disclosures that are “unavoidable,” arguing that the definition could be “pretty murky.” Instead, he said, the agency should rely more on the platforms and built-in transparency tools.

“For a lot of influencers, it’s a cautionary tale,” he said. “I think a lot of them get caught in a lot of the crypto NFT type promotions that a lot of people are doing and they have to realize they’re going to be held to a certain standard by the SEC.”

Ryan Detert, co-founder and CEO of the influencer marketing company Influential, said the FTC’s requirements are already clear and that disclosures are needed to maintain consumer confidence.

“Disclosure is a necessity for consumer confidence and to be FTC compliant,” Detert said. “These moments remind creators that with great power comes great responsibility.”

Influencers are responsible for properly representing themselves and the companies they work with, said Kyle Wong, co-founder and CEO of Pixlee, a content marketing startup. When they’re not transparent, he said they risk their own credibility and regulatory consequences.

“The majority of influencers aren’t celebrities,” Wong said. “They’re passionate content creators who have built an engaged community based on shared values. Those influencers who have worked to build relationships that emphasize transparency remain credible.”


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Elon Musk Says Sam Bankman-Fried Probably Donated Over $1B To Support Democratic Elections



Elon Musk Says Sam Bankman-Fried Probably Donated Over $1B To Support Democratic Elections
  • Elon Musk hints on his official Twitter account that SBF may have donated more than $1B to the Democratic elections.
  • SBF the ex-CEO of FTX confirmed that he has made undisclosed donations to the republican party, and donated the same amount to both parties.
  • Republican Senator Ted Cruz also called FTX “a Bernie Maddof style fraud that cost investors Billions”.

Sam Bankman-Fried, the ex-CEO of now-bankrupt exchange FTX and FTX.US, is said to have donated “dark money” to the democratic party. Elon Musk took to Twitter to say that he believes the undisclosed number of democratic party donations probably reached over $1B, whereas only $40M were disclosed.

That’s just the publicly disclosed number. His actual support of Dem elections is probably over $1B. The money went somewhere, so where did it go?

— Elon Musk (@elonmusk) December 3, 2022

In a recent interview with crypto journalist Tiffany Fung, SBF stated that he donated to both parties equally.”I donated to both parties. I donated about the same amount to both parties,” Bankman-Fried tells Tiffany Fung on a phone interview.

“All my Republican donations were dark,” he said, referring to political donations that are not publicly disclosed. “The reason was not for regulatory reasons; it’s because reporters freak the fuck out if you donate to Republicans. They’re all super liberal, and I didn’t want to have that fight.”

As SBF admits that some of the donations were not publicly disclosed, it seems likely that more non-publicly disclosed donations to the democratic party.

Undisclosed donations have been made possible by the supreme court’s decision in the Citizen United case, which allows donors to donate anonymously. Since this decision, more than $1bn have poured into federal elections since 2010.

Elon Musk is very vocal on Twitter regarding the SBF case and the FTX bankruptcy scandal. On 13th of November Musk tweeted to hint that SBF is a major donor on the democratic party therefore he believes there will be no investigation by the SEC towards the exchange.

Republican Senator Ted Cruz also called FTX “a Bernie Maddof style fraud that cost investors Billions”.

On December 1st Senate held a hearing to discuss and urge lawmakers to act quicky in installing a regulatory framework for digital assets.The hearing was hosted by the Senate Agriculture Comittee and did not include the main person at the center of this scandal, CEO Sam-Bankman Fried. The person invited to testify was Rostin Banham, the Chairman of Commodity Futures Trading Commission (CFTC), agency that regulates the derivate markets. Benham called on immediate oversight of most crypto markets and “comprehensive market regulation.”

Benham’s testimony is controversial as he had a very close working relationship with Bankman-Fried over the last year. The Bill advocated in the hearing was the same one that Bankman-Fried encouraged himself earlier this year which has been questionable.

Denis Keheller, the president of advocacy group Better Markets argued over the influence SBG would have had on the CFTC. It is unclear how much access influence Sam-Bankman Fried may have bought at the agency.

“When something like this happens, typically you have an overreaction of elected officials of the need to crack down on the industry,” he says. “Instead, this hearing is to push a bill that was endorsed and pushed by FTX.”

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FTX’s Sam Bankman-Fried Knew More About Alameda Research Finances Than Let On: Forbes Report



FTX’s Sam Bankman-Fried Knew More About Alameda Research Finances Than Let On: Forbes Report
  • A report by Forbes reveals that Sam Bankman-Fried knew about Alameda Research’s financial dealings.
  • SBF previously denied being “deeply aware” of Alameda’s finances. 
  • The former FTX chief regularly shared documents related to Alameda with Forbes over the past 2 years. 
  • The report indicates that SBF was well aware of Alameda’s business activities. 

An exclusive report published by Forbes has shed light on information that is in contradiction with recent claims made by Sam Bankman-Fried, the man behind the bankrupt crypto exchange FTX. 

Sam Bankman-Fried was aware of Alameda’s finances

In an interview at the DealBook Summit, SBF claimed that he was surprised by how big Alameda’s position was, referring to the risky trades made by his quantitative trading firm. The disgraced CEO tried to avoid accountability for Alameda’s actions by claiming that he was not involved in its day-to-day operations. “Alameda’s finances I was not deeply aware of. I was only surface-level aware of Alameda’s finances” he claimed. 

However, the report by Forbes provides an insight into the discussions they had with SBF in order to calculate his net worth for their annual World’s Billionaires list. During these discussions, Bankman-Fried shared several details that indicated that he was in fact well aware of Alameda Research’s finances. 

In order to prove his net worth, SBF detailed some of Alameda’s major holdings and several transactions involving Solana and Serum tokens as well as the notorious FTT. Some of these details were shared as recently as August 2022. The level of information found in the documents shared by Sam Bankman-Fried suggested that he knew more about Alameda than he revealed during his controversial interview. The former FTX CEO included details about his quant trading firm’s funds along with its token holdings, which at the time included 53 million SOL, 176 million FTT, and more than 3 billion SRM. According to this, the value of his share of Alameda’s funds under management was $8.6 billion. 

FTX's Sam Bankman-Fried Knew More About Alameda Research Finances Than Let On: Forbes Report 11

While it is still unclear as to how involved Sam Bankman-Fried was in the day-to-day operations at Alameda Research, the detailed description of the trading firm’s finances shared by him suggests that he knew more than he let on. 

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Mike Novogratz’s Galaxy Digital might buy crypto custodian GK8 from Celsius



Mike Novogratz’s Galaxy Digital might buy crypto custodian GK8 from Celsius


  • Galaxy Digital won a bid to buy one of Celsius’s assets as part of bankruptcy proceedings for the crypto lender.
  • Mike Novogratz’s company will buy GK8, a custodial business that Celsius acquired over a year ago in November 2021.
  • The custodian plans to launch crypto trading and lending for institutional investors.

Galaxy Digital submitted a successful bid for GK8, a crypto custodial service listed as an asset by Celsius during the lender’s bankruptcy proceedings. Both entity did not disclose the acquisition sum at press time. 

GK8 was acquired by Celsius in November 2021 when the bull run was near its peak. Months after, the lender was crippled by slumped crypto prices and Terra exposure. Celsius paused withdrawals shortly after LUNA and UST imploded in May, before declaring bankruptcy in July,

CEO Mike Novogratz said in a statement that adding GK8 to Galaxy Digital’s businesses offers a key ingredient for growth. Novogratz also addressed concerns regarding possible conflict of interest from the deal, ensuring that “clients will have the option to store their digital assets at or separate from Galaxy”.

Adding GK8 to our prime offering at this pivotal moment for our industry also highlights our continued willingness to take advantage of strategic opportunities to grow Galaxy in a sustainable manner.

Galaxy will also expand its workforce by some 40 employees as part of the deal. The firm hopes to onboard blockchain developers and cryptographers to name a few.

Galaxy Digital scoops Celsius asset after $76.8 million FTX exposure 

The digital asset firm reported losses in Q3 earnings after weathering contagion from Terra’s $40 billion crash. Galaxy’s earning report also revealed exposure to the bankrupt crypto exchange FTX. 

EWN reported that Novogratz’s firm tried to withdraw $47.5 million of the total sum from FTX before Sam Bankman-Fried’s exchange froze withdrawals.  The company

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