Securities and Exchange Commission vs. Kim Kardashian, Cryptocurrencies and the "Major Questions Doctrine"
The SEC has brought some highly publicized enforcement actions against Kim Kardashian and other celebrity social media influencers who received undisclosed payments for their endorsement of cryptocurrencies. This Article describes those cases and analyzes whether the SEC exceeds its authority under the Constitutional “major questions doctrine” recently applied by the Supreme Court in West Virginia v. EPA. That doctrine prohibits a federal agency from regulating activities that raise a major question that Congress, rather than the agency, must resolve. Such a question is one in which there is major political and economic interest and over which the agency has no clear authority from Congress to act. As this Article relates, the cryptocurrency market is of major political and economic interest to millions of individuals and businesses. It is also the subject of intense policymaking efforts in the Executive Branch and Congress. This Article further analyzes whether Congress granted the SEC clear authority to regulate the cryptocurrency market. It finds no such authority. In its absence, the SEC relies on the 1946 Supreme Court decision in SEC v. Howey as the basis for its jurisdictional claims. This Article finds that decision, which involved the sale of Florida orange grove investments to tourists, to be vague at best and anything but clear on whether cryptocurrencies are “securities” that are subject to SEC regulation.
Jerry W. Markham, Securities and Exchange Commission vs. Kim Kardashian, Cryptocurrencies and the "Major Questions Doctrine", 14 Wm. & Mary Bus. L. Rev. 515 (2023). Availaable at https://scholarship.law.wm.edu/wmblr/vol14/iss3/2/