Kim Kardashian’s $1.26 million fantastic from the Securities and Exchange Commission could just be the primary shot in a broader regulatory volley against crypto-hawking celebrities, experts tell The Post.
A-listers including Matt Damon, Tom Brady and Larry David, who appeared in ads for cryptocurrency exchanges during this 12 months’s Super Bowl — in addition to stars like Mike Tyson and Reese Witherspoon who participated in so-called NFT drops — might be casualties of a crypto crackdown from the SEC.
“This can be a litigation strategy of going after public figures — now everyone in Hollywood will notice,” Columbia Law professor and securities expert John Coffee told The Post. “[SEC Chair] Gary Gensler isn’t afraid of publicity.”
Celebrities hawking cryptocurrency related products might be targeted next.Getty Images
To be certain, celebrities have been selling goods on QVC and informercials for a long time before Instagram or cryptocurrencies even existed. But lawyers caution that pushing financial products is way thornier than shilling for skincare products or clothing.
“Celebrities aren’t pondering through the incontrovertible fact that cryptocurrencies could also be governed by securities laws”, former SEC enforcement attorney Ron Geffner told The Post, calling the Kardashian news the “tip of the iceberg.”
“There are way more wide-reaching implications for celebrities and influencers in coping with securities and the laws about regulating securities than other industries,” Geffner added.
Matt Damon has starred in commercials for crypto exchange FTX.
Kardashian’s flagrant promotion of a person crypto token was effectively low-hanging fruit for regulators, experts said. But celebs who promoted sites like Crypto.com and FTX — where customers can trade a large swath of cryptocurrencies — may be targets, in accordance with crypto expert and London School of Economics visiting fellow Garrick Hileman.
“I might wonder if that’s the following frontier,” Hileman said of targeting celebs for promoting exchanges.
Gensler has said many cryptocurrencies are operating as “unregistered securities” and the SEC could subsequently interpret celebs who promote sites for trading the digital coins as violating securities laws, Hileman said.
He added that David, Damon and Brady must be “anxious” in regards to the Kardashian news.
“There’s a repute hit which comes with winding up within the SEC’s crosshairs,” he said.
Gisele Bündchen and Tom Brady have embraced cryptocurrency — appearing in ads for FTX.FTX
Lawrence Cunningham, a law professor at George Washington University, called on the SEC to do more to focus on celebrities who promote cryptocurrencies.
“The best risk peculiar American investors face is from manipulative schemes and the SEC’s primary statutory mandate is to mitigate those risks by policing fraudsters,” Cunningham told The Post. “Picking one celebrity because the showcase and highlighting her failure to reveal payments doesn’t reflect a sturdy enforcement program.”
Representatives for Witherspoon, Damon, David and Tyson didn’t immediately reply to request for comment.
In a single sign that celebrities might be backing off affiliating themselves with cryptocurrencies, some insiders pointed to a bizarre event with actress Charlize Theron at a cryptocurrency conference last Thursday.
During crypto firm Circle’s Converge22 conference in San Francisco, Theron participated in a question-and-answer session with Circle’s global head of policy, Dante Disparte. Despite the incontrovertible fact that Theron was speaking with the manager of a crypto company at a crypto conference, the Q&A didn’t touch on cryptocurrencies or the blockchain in any respect, as a substitute centering around Theron’s life story and charity work.
The conversation left the audience stuffed with crypto fanatics scratching their heads.
“I actually have to wonder if her lawyers said: ‘We will’t talk crypto,’” said Hileman, who attended the conference.
Theron didn’t reply to a request for comment.