The SEC has its eyes on celebrities’ love affair with crypto. Currently on the chopping block: Kim Kardashian.

Kardashian was ordered to pay a $1.26 million fine yesterday for not reporting that she was paid to promote EMAX tokens.

• The fine affirms an SEC position that’s controversial among crypto enthusiasts: Cryptocurrencies are, in fact, securities. Just like stock promoters, celebrities need to follow the rules, Protocol’s Ben Pimentel reports.
• “When celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn’t mean that those investment products are right for all investors," SEC Chair Gary Gensler said in a statement.

Celebrities and investment advice probably shouldn’t mix. “Overexuberance without proper disclosures and disclaimers is going to be considered misleading and is going to get people in hot water,” Andrew Lom, global head of private wealth at Norton Rose Fulbright, told Ben.

But Kardasian’s fine is actually a win for the SEC. A high-profile celebrity getting burned by crypto regulation could also serve as a “warning to others that they must settle their investigations by the SEC,” said Bill Callahan, director of government strategic affairs at Blockchain Intelligence Group.

• The case “may turn into the best public service announcement not to take investment advice from a celebrity,” he said.

Celebrities may want to think twice about endorsing crypto, Ben told Nat. But it won't matter too much to crypto firms, who already reaped the major benefits of celebrity endorsements earlier this year. Now that they have bigger fish to fry with the crypto crash and increased regulation, Ben said, "marketing has become less of a priority.”