The Securities and Exchange Commission said this week that it has settled charges against Kim Kardashian for promoting a crypto investment on her Instagram page. In June 2021, Ms. Kardashian touted EthereumMax’s token, EMAX, to her 331 million followers, without disclosing she was paid $250,000 for the post.

It was a bad investment for her followers. EMAX has since lost 99% of its value. To settle the charges, Ms. Kardashian must disgorge the fee with interest, pay a million-dollar penalty, and promise not to promote any crypto products for three years.

While consistent with long-settled law and SEC practice, this prosecution is bad policy. The SEC would serve investors better by leaving Ms. Kardashian alone. Section 17(b) of the Securities Act of 1933 requires any person who gives publicity to the sale of a security to disclose any compensation for doing so. The SEC has enforced this anti-touting rule aggressively, bringing cases against people who have published entirely accurate internet posts about companies in return for undisclosed benefits.

Read more at The Wall Street Journal