Kim Kardashian’s Crypto Fail Provides An Expensive Lesson For All Influencers

Social Media Kim Kardashian’s Crypto Fail Provides An Expensive Lesson For All Influencers John Brandon Contributor Opinions expressed by Forbes Contributors are their own. John Brandon covers social media trends. @jmbrandonbb Following New! Follow this author to stay notified about their latest stories.

Got it! Oct 7, 2022, 10:32am EDT | New! Click on the conversation bubble to join the conversation Got it! Share to Facebook Share to Twitter Share to Linkedin FILE – Kim Kardashian attends The Metropolitan Museum of Art’s Costume Institute benefit gala . . .

[+] celebrating the opening of the “In America: An Anthology of Fashion” exhibition on Monday, May 2, 2022, in New York. Reality tv star and entrepreneur Kim Kardashian has agreed to settle charges brought by the Securities and Exchange Commission and pay $1. 26 million because she promoted on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the plug.

The SEC said Monday, Oct. 3, 2022, that Kardashian has agreed to cooperate with its ongoing investigation. (Photo by Evan Agostini/Invision/AP, File) Associated Press What you say, what you do, and what you disclose when you are influencing others on social media just came under heavy scrutiny once again .

This time, it has a crypto angle that is enlightening for those of us who watch from the bleacher seats. Kim Kardashian was fined $1. 2M by the SEC because she allegedly failed to disclose the fact that she was paid to mention EthereumMax on social media posts .

This sent shockwaves through the world of social media influencers, right down to the jewelry they wear, the products they claim to love, and even the cryptocurrency they prefer. Before we dive into the implications, though, let’s set the stage. Kardashian has 331 million followers on Instagram, and (let’s be honest here) is mostly famous for being famous.

She knows how to make headlines, though. She usually posts about fashion. At the very least, it doesn’t really make sense for her to suddenly take an interest in crypto, let alone one particular currency.

Her Instagram story dating back to June asks if anyone is into crypto and then proceeds to namecheck EthereumMax. She included the hashtag #ad but that’s not exactly radical transparency about her newfound interest or whether she was paid. In her Instagram story, she was “sharing what my friends just told me” which, if anything, makes it seem like she heard it at the bar and was not part of a contractual obligation.

I don’t mind that influencers are paid to promote products, as long as they make it perfectly clear. The SEC is obviously trying to make an example of her. MORE FOR YOU Livestream Shopping Stays Hot As Whatnot Valuation More Than Doubles To $3.

7 Billion Here’s Who’s Most Likely To Vote In The November Midterms, Poll Finds Dow Plunges 400 Points After Resilient Jobs Report—Here’s Why Investors Are Hoping For Rising Unemployment The real lesson here for social media influencers is not whether they should disclose something or should expect more frequent fines. That should be pretty obvious by now especially with cases dating all the way back to the “mommy bloggers” pay-for-play scandal and newly released FTC guidance about disclosures from 2019. The real debate is whether it makes sense for an influencer to post about products like they in the first place, and whether that will lead to suspicion.

Should we worry more? I don’t think so. Authentic influence doesn’t means you have to worry about fines when you are honest. However, if you’re an influencer, I do have some advice.

First, don’t panic. It’s okay to mention things you like without being worried you will be tracked down or fined, as long as you aren’t paid for the mention . Your followers will know anyway.

To keep people interested and paying attention, authenticity wins. Go with your gut. If you are merely talking about a favorite gadget or hair product because you actually use it , don’t worry whether your followers (or the SEC) will question your motives.

I’ll use myself as an example. I’m not a social media influencer, but if I was to suddenly switch gears and start posting about fashion or European delicacies, people would know something is up. It wouldn’t make sense to my followers.

I wouldn’t be “influencing” them anyway. I’d lose followers. On the other hand, if I mentioned some fishing lures or a favorite coffeeshop, it would fit right into my feed.

My rule of thumb is, if you as an influencer suddenly start posting about something off-brand and you are paid to mention the product, make it as clear as possible (meaning, use more than a hashtag). Don’t risk the scrutiny. Now, this is the gray area because I’m sure the SEC wants people to be more transparent.

If it’s a paid ad and doesn’t really fit your normal posting routine, it’s better to disclose it because everyone is going to wonder anyway. Why draw attention to yourself with off-brand posts? Yet, if you stick to what you know and love, there’s no reason your authenticity and honesty will ever raise suspicion. And, of course, keep a paper trail.

For an influencer, maintain tight records for any paid promotions you do and how you disclosed it, be clear about the paid mention, and be ready to show the paperwork. For everything else, be true to yourself and don’t worry. Honest influence is still legal.

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