Influencer Scams: The $100K Tweet That Costs You Everything

On 3 October 2022 the US Securities and Exchange Commission announced that Kim Kardashian would pay $1.26 million to settle charges over a single social media post. In June 2021 she had told her Instagram followers to look at a token called EthereumMax. She did not tell them she had been paid $250,000 to say it. Kardashian neither admitted nor denied the charges and agreed not to promote crypto for three years.

It was the most famous case of its kind, and one of the few that ended in a penalty. The method behind it is older than crypto. A project pays a well-known person to talk about its token. Followers buy. People who got the token early or cheaply, the insiders, sell into that demand. The promoter keeps the fee whatever happens to the price.

Why paid posts move tokens

Most of these tokens have no business behind them. A memecoin is a token with no company, profits or assets, whose price depends only on how many people want it. In stock market terms it is a penny stock with no earnings and no filings, and attention is the only thing that sets the price. A post from someone with millions of followers is the cheapest way to buy attention.

That is why US law already has a rule for it. Section 17(b) of the Securities Act of 1933, the anti-touting provision, says anyone paid to promote a security must disclose who paid and how much. The SEC's position for years was that many tokens are securities, so a paid post with no disclosure is illegal touting, the same as an undisclosed paid tip on a stock.

The cases that got to court

The first came in November 2018. Boxer Floyd Mayweather Jr. and music producer DJ Khaled settled SEC charges for promoting the initial coin offering of Centra Tech, a token sale that raised money from the public the way a share issue would. Mayweather had been paid $100,000 and Khaled $50,000, and neither disclosed it. Mayweather agreed to pay about $614,775 and Khaled about $152,725. Centra's founders were later convicted of fraud.

In March 2023 the SEC charged Justin Sun, the founder of the Tron blockchain, with fraud and unregistered sales of his TRX and BTT tokens. It also charged eight celebrities who had promoted them without disclosing payment: actress Lindsay Lohan, YouTuber and boxer Jake Paul, rappers Soulja Boy and Lil Yachty, singers Ne-Yo, Akon and Austin Mahone, and adult film actress Kendra Lust. Six settled at once, paying just over $400,000 between them. Mahone settled in August 2023. After the change of administration, the SEC asked for a pause in February 2025 to discuss a settlement. It later dropped its claims against Sun, his foundations and Soulja Boy, while Rainberry, the company behind BitTorrent, agreed to a $10 million penalty, The Block reported.

Private lawsuits have done worse. Investors who lost money when the FTX exchange collapsed in November 2022 sued the stars who had advertised it, including Tom Brady, Gisele Bundchen, Stephen Curry, Larry David, Shohei Ohtani and Naomi Osaka. On 7 May 2025 Judge K. Michael Moore in Florida dismissed 12 of their 14 claims, finding no evidence the celebrities knew about the fraud. Only the claim that they promoted unregistered securities survived.

Logan Paul, the YouTuber and wrestler, promoted CryptoZoo, a game in which players were meant to buy digital animal eggs and earn tokens. The game never worked. In October 2025 Judge Alan Albright of the Western District of Texas dismissed buyers' claims against Paul, calling his promises that it would be a fun game that made money "puffery" rather than fraud. The buyers filed an amended complaint, and in February 2026 Paul moved to dismiss again.

The pattern repeats

The cases rarely change the shape of the next one. In June 2021 the gaming group FaZe Clan dropped one member and suspended three others after they promoted SaveTheKids, a token sold as a charity, whose price collapsed shortly after launch as large holders sold.

In December 2024 Haliey Welch, known online as the "Hawk Tuah girl", launched a token called HAWK. It lost more than 90% of its value within hours. Twelve buyers sued her business partners and the platform that launched it, though Welch herself was not named. In March 2025 her lawyer said the SEC had closed its inquiry into her without action.

In January 2025, three days before his inauguration, Donald Trump launched the TRUMP memecoin. About 80% of the supply was held by companies linked to him, CIC Digital and Fight Fight Fight LLC, released to them over three years. In February 2025 Argentina's president, Javier Milei, posted about a token called LIBRA. It reached a market value of about $4.5 billion in 43 minutes, then fell about 94%, and blockchain analytics firm Nansen counted $251 million in trader losses.

The cop left the building

Enforcement shrank just as these launches grew. Cornerstone Research reported in January 2026 that the SEC brought 13 crypto enforcement actions in 2025, down 60% from 33 in 2024. Eight came after Paul Atkins became chairman, and all eight alleged fraud. The agency also stepped back from its broad argument that most tokens are securities, which is the basis for applying the anti-touting rule to crypto. If a token is not a security, an undisclosed paid post about it may break the Federal Trade Commission's advertising rules, but not securities law.

The basic conflict has not changed. A promoter is paid on posting. A follower only makes money if the price rises after buying, which means someone later must pay more. "Not financial advice", the line at the end of so many posts, is not a legal shield. It is what people write when they know their words will move money.