A bevy of celebrity-backed meme coins has captured the crypto zeitgeist recently, but experts say they may be courting bigger legal risks compared to past enforcement actions.

The U.S. Securities and Exchange Commission (SEC) has targeted celebrities for promoting cryptocurrencies on social media before—a list that notably includes Kim Kardashian, the celebrity entrepreneur and step-daughter to Caitlyn Jenner. And Jenner this week launched meme coins on Solana and Ethereum bearing the Olympic gold medalist’s name.

To the extent that Jenner’s meme coins are unregistered securities, she could face greater legal consequences compared to Kardashian, attorneys specializing in securities laws told Decrypt. In essence, Jenner could be viewed as both an issuer and a promoter—not just a paid shill.

When the SEC unveiled charges against Kim Kardashian in 2022 over her promotion of Ethereum Max—unrelated to the second-largest crypto—regulators claimed the entrepreneur’s social media activity violated the “anti-touting provision of the federal securities laws.”

The only thing that Kardashian did wrong was not disclose the $250,000 in compensation that she received for her promotion, said Philip Moustakis, who previously served as senior counsel in the SEC’s Division of Enforcement, and is now a partner at Seward & Kissel LLP.

Without admitting to or denying the SEC’s charges, Kardashian paid $1.26 million to settle the SEC’s claims: Of that figure, Kardashian agreed to pay $1 million in penalties, in addition to around $260,000 in disgorgement.

“Disgorgement is how much [Kardashian] got paid for touting, which in most cases is going to be substantially lower than [...] a full on capital raise by somebody else issuing a token,” Moustakis told Decrypt. “It’s the seriousness of the exposure, and then it’s the seriousness of the conduct.”

Launched through pump.fun—the Solana protocol that allows anyone to instantly launch a tradable token for only a few dollars worth of crypto—Jenner claims she didn’t have custody over any JENNER tokens on Solana.

A distinct group of digital wallets that held over 25% of JENNER's supply at launch later dumped the tokens for around $500,000 in other coins, according to analytics from Bubblemaps. Earlier this week, Jenner’s Twitter account claimed she had bought more JENNER—and will be “always bullish.”

Despite Jenner being “happy with the growth” of her Solana-based meme coin so far, the asset has encountered headwinds following the launch of its Ethereum-based counterpart. The value of Jenner on Solana has plummeted 60% since Monday to $0.00672251.

Her former business partner associated with the Solana launch told Decrypt that he’s not associated with Jenner’s Ethereum-based token.

Though Jenner’s role in the meme coin launches may be distinct as part of the issuing team, her promotional statements could still land her in hot water, Arthur Jakoby, a partner at the law firm Herrick told Decrypt.

“The touting stuff still applies,” he said. “This is actually more risky [than what Kim Kardashian did] because they can be accused of soliciting an unregistered security.”

Giving the public instructions on how to buy an asset—perhaps, posting a link to where it could be bought—could be considered solicitation, Jakoby said. That doesn’t have to be targeted advertising, per se, he continued, and could include mass marketing over the internet.

“It's sad that this stuff is still happening, but it's happening for a reason,” he said. “People consider having some sort of celebrity involved with the project will entice more people.”

Regarding Kardashian, the SEC typically sees value in bringing enforcement actions that will garner widespread public attention, Moustakis said. That’s especially true if the agency thinks the enforcement action will change market behavior for the better, he added.

“A touting case against Kim Kardashian is going to get far more attention than one against someone you’ve never heard of,” Moustakis said. “Celebrities are, in a way, at higher risk when they're making public statements, marketing, and promoting their own tokens.”

Edited by Ryan Ozawa.