1 00:00:02,720 --> 00:00:05,040 Speaker 1: My name is Lily Madden and I'm a proud Arunda 2 00:00:05,240 --> 00:00:10,040 Speaker 1: Bunjelung Kalkotin woman from Gadighl country. The Daily oz acknowledges 3 00:00:10,119 --> 00:00:12,280 Speaker 1: that this podcast is recorded on the lands of the 4 00:00:12,320 --> 00:00:15,880 Speaker 1: Gadighl people and pays respect to all Aboriginal and Torres 5 00:00:15,880 --> 00:00:18,799 Speaker 1: Strait Island and nations. We pay our respects to the 6 00:00:18,800 --> 00:00:21,599 Speaker 1: first peoples of these countries, both past and present. 7 00:00:29,160 --> 00:00:31,840 Speaker 2: Good morning and welcome to the Daily Ods. It's Wednesday, 8 00:00:31,880 --> 00:00:35,600 Speaker 2: the fifth of October. I'm zara, I'm sam. Kim Karashian 9 00:00:35,720 --> 00:00:38,199 Speaker 2: has agreed to pay over a million dollars to a 10 00:00:38,280 --> 00:00:41,720 Speaker 2: US government agency to settle a legal case. Not often 11 00:00:41,720 --> 00:00:44,600 Speaker 2: we're talking about Kim Kardashian on this podcast, but the 12 00:00:44,640 --> 00:00:48,319 Speaker 2: Securities and Exchange Commission alleged she should have shared how 13 00:00:48,360 --> 00:00:51,479 Speaker 2: much she was paid to promote crypto to her hundreds 14 00:00:51,479 --> 00:00:54,880 Speaker 2: of millions of Insta followers. We'll have all the details 15 00:00:54,920 --> 00:00:57,600 Speaker 2: on the case against Kimmi k plus what else has 16 00:00:57,640 --> 00:01:01,280 Speaker 2: been happening in the crypto sponsored sphere, But Fir Sam, 17 00:01:01,320 --> 00:01:02,520 Speaker 2: what is making headlines. 18 00:01:05,600 --> 00:01:08,520 Speaker 3: The Reserve Bank of Australia has raised the cash rate 19 00:01:08,560 --> 00:01:11,520 Speaker 3: to two point six percent, marking the sixth month in 20 00:01:11,560 --> 00:01:14,440 Speaker 3: a row that the figure has increased. The RBA lifted 21 00:01:14,440 --> 00:01:17,160 Speaker 3: the rate byero point two five percentage points yesterday, which 22 00:01:17,240 --> 00:01:20,960 Speaker 3: was the smallest increase since May and follows four consecutive 23 00:01:21,000 --> 00:01:23,039 Speaker 3: raises of point five percentage points. 24 00:01:24,840 --> 00:01:28,759 Speaker 2: A Telstra spokesperson confirmed yesterday the company was the subject 25 00:01:28,840 --> 00:01:31,120 Speaker 2: of a data breach that released the full names and 26 00:01:31,280 --> 00:01:34,720 Speaker 2: email addresses of employees. The data is from twenty seventeen, 27 00:01:34,800 --> 00:01:37,560 Speaker 2: but only came to light yesterday. It did not contain 28 00:01:37,680 --> 00:01:41,920 Speaker 2: any customer information, according to the telco, The information from 29 00:01:42,000 --> 00:01:45,360 Speaker 2: the data breach was only leaked online recently in an 30 00:01:45,400 --> 00:01:47,640 Speaker 2: attempt to profit from the optus breach. 31 00:01:48,520 --> 00:01:52,000 Speaker 3: Has not been a good couple of weeks for our telcos. Meanwhile, 32 00:01:52,040 --> 00:01:55,160 Speaker 3: Australian of the Adylan Orcott delivered a new report on 33 00:01:55,240 --> 00:01:58,920 Speaker 3: the National Disability Insurance Scheme to the Australian Government yesterday. 34 00:01:59,320 --> 00:02:02,400 Speaker 3: While speaking to reporters, Olcott said the report would recommend 35 00:02:02,520 --> 00:02:06,560 Speaker 3: prioritizing voices of NDIS participants on issues that affect them 36 00:02:06,920 --> 00:02:09,880 Speaker 3: and putting people with disability in positions of leadership. 37 00:02:11,280 --> 00:02:15,040 Speaker 2: And the good news, Swedish scientist Savante Pabo has won 38 00:02:15,080 --> 00:02:18,040 Speaker 2: the Nobel Prize in medicine. For his research into human 39 00:02:18,080 --> 00:02:21,800 Speaker 2: evolution and our immune systems, Pabo discovered a gene flow 40 00:02:21,840 --> 00:02:25,680 Speaker 2: between Neanderthals, an extinct species of humans that lived until 41 00:02:25,720 --> 00:02:29,520 Speaker 2: about forty thousand years ago, and Homo sapiens, the species 42 00:02:29,520 --> 00:02:33,160 Speaker 2: that all other living human beings belong to. Pabo's Nobel 43 00:02:33,160 --> 00:02:35,520 Speaker 2: prize kicks off a week of announcements, with the prize 44 00:02:35,520 --> 00:02:40,839 Speaker 2: in physics set to be awarded today. For someone who 45 00:02:40,919 --> 00:02:45,000 Speaker 2: has as many business ventures as Kim Kardashian does, Sam, 46 00:02:45,160 --> 00:02:49,120 Speaker 2: it's interesting to me that she's still actively posting sponsored 47 00:02:49,160 --> 00:02:52,400 Speaker 2: content on her Instagram and that she got into trouble 48 00:02:52,440 --> 00:02:54,440 Speaker 2: over it. I think a good place to start here 49 00:02:54,520 --> 00:02:57,680 Speaker 2: is why did this post cause these sorts of repercussions? 50 00:02:57,720 --> 00:02:59,919 Speaker 2: There are lots of sponsored posts out there in the 51 00:03:00,240 --> 00:03:01,880 Speaker 2: insta world. Why this one? 52 00:03:02,040 --> 00:03:04,639 Speaker 3: Well, I think the most important bit of context here 53 00:03:04,800 --> 00:03:07,880 Speaker 3: is that the post was advertising a cryptocurrency, and that 54 00:03:07,960 --> 00:03:10,239 Speaker 3: crypto coin is called Ethereum Max. 55 00:03:10,320 --> 00:03:13,520 Speaker 2: Okay, So, before we go any further, a refresher on 56 00:03:13,520 --> 00:03:16,040 Speaker 2: what cryptocurrency is, please. So. 57 00:03:16,160 --> 00:03:20,320 Speaker 3: Cryptocurrency is essentially any form of currency that only exists 58 00:03:20,360 --> 00:03:24,760 Speaker 3: digitally or virtually, and uses an encrypted method to secure transactions. 59 00:03:25,160 --> 00:03:29,400 Speaker 3: Cryptocurrencies don't have a central issuing or regulating authority like 60 00:03:29,480 --> 00:03:32,760 Speaker 3: a central bank or even a government, but instead they 61 00:03:32,840 --> 00:03:36,400 Speaker 3: use a decentralized system to record transactions and issue new 62 00:03:36,480 --> 00:03:39,520 Speaker 3: units of the currency when there's movements in how much 63 00:03:39,520 --> 00:03:43,400 Speaker 3: it's worth now. Right at the beginning of the cryptocurrency revolution, 64 00:03:43,640 --> 00:03:47,200 Speaker 3: there were three main reasons that people liked crypto confidentiality, 65 00:03:47,280 --> 00:03:50,920 Speaker 3: so the information cannot be understood by anyone, trust, the 66 00:03:50,960 --> 00:03:55,360 Speaker 3: information can't be altered, and authentication. The sender and receiver 67 00:03:55,600 --> 00:03:59,880 Speaker 3: can confirm with each other via an independent third party. 68 00:04:00,080 --> 00:04:03,560 Speaker 2: So with that knowledge in hand, talk us through where 69 00:04:03,600 --> 00:04:05,680 Speaker 2: Kim Kardashian comes into this story. 70 00:04:05,920 --> 00:04:08,360 Speaker 3: So let's go back to the thirteenth of June of 71 00:04:08,520 --> 00:04:11,840 Speaker 3: last year, so well over a year now, crypto is 72 00:04:11,960 --> 00:04:15,440 Speaker 3: riding high. It's nothing like the crypto landscape we see today. 73 00:04:16,160 --> 00:04:19,400 Speaker 3: Bitcoin surge to its highest ever value earlier that year, 74 00:04:19,400 --> 00:04:22,080 Speaker 3: and for the first time, there are celebrities, mainly on 75 00:04:22,120 --> 00:04:26,560 Speaker 3: Instagram publicly buying into particular coins. They're buying NFTs non 76 00:04:26,560 --> 00:04:30,680 Speaker 3: fungible tokens and designing their own, particularly around artwork, and 77 00:04:30,720 --> 00:04:33,919 Speaker 3: they're appearing in ads for various currencies and they're also 78 00:04:34,040 --> 00:04:37,480 Speaker 3: using social media to promote crypto to their fans. Now, 79 00:04:37,520 --> 00:04:39,800 Speaker 3: in the midst of all of this, Kim Kardashian, who 80 00:04:39,839 --> 00:04:42,680 Speaker 3: is undoubtedly one of the most famous people on the planet, 81 00:04:42,920 --> 00:04:45,440 Speaker 3: is paid two hundred and fifty thousand US dollars to 82 00:04:45,480 --> 00:04:48,800 Speaker 3: post would not mind that it will one Instagram story 83 00:04:48,839 --> 00:04:51,520 Speaker 3: a quarter of a million dollars for one Instagram story, 84 00:04:51,760 --> 00:04:53,919 Speaker 3: And Zara, why don't you read out what part of 85 00:04:53,960 --> 00:04:55,080 Speaker 3: that story says. 86 00:04:55,320 --> 00:04:58,040 Speaker 2: Are you guys into crypto? Question mark? Question mark? Question 87 00:04:58,120 --> 00:05:01,600 Speaker 2: mark question mark? This is not financial advice, but sharing 88 00:05:01,640 --> 00:05:04,400 Speaker 2: what my friends just told me about the Ethereum max 89 00:05:04,440 --> 00:05:08,520 Speaker 2: token hashtag ad And then it suggests that viewers should 90 00:05:08,520 --> 00:05:11,279 Speaker 2: swipe up I assume so that they can buy into 91 00:05:11,320 --> 00:05:12,600 Speaker 2: Ethereum exactly. 92 00:05:12,680 --> 00:05:15,760 Speaker 3: And at the time, Kardashian had about two hundred and 93 00:05:15,800 --> 00:05:19,680 Speaker 3: twenty million followers, so that's a pretty powerful ad spot. 94 00:05:19,760 --> 00:05:22,160 Speaker 3: There are a lot of eyes on her Instagram stories 95 00:05:22,160 --> 00:05:24,440 Speaker 3: on any given day, and that's a lot of people 96 00:05:24,480 --> 00:05:28,440 Speaker 3: who could conceivably make this significant financial decision based on 97 00:05:28,480 --> 00:05:31,440 Speaker 3: her endorsement. Even though the ad does say this is 98 00:05:31,480 --> 00:05:33,080 Speaker 3: not financial advice. 99 00:05:32,960 --> 00:05:35,920 Speaker 2: We are not Kim Kardashian, so we are clearly labeling 100 00:05:36,080 --> 00:05:38,720 Speaker 2: that we are now throwing to an AD from our sponsor. 101 00:05:40,160 --> 00:05:42,680 Speaker 2: All right, so back to it. Something that stuck out 102 00:05:42,720 --> 00:05:46,680 Speaker 2: to me is that Kim Kardashian actually did include hashtag AD, 103 00:05:46,760 --> 00:05:49,479 Speaker 2: which is one of the legal checkboxes that you need 104 00:05:49,520 --> 00:05:52,080 Speaker 2: to tick to comply with most of the regulations that 105 00:05:52,120 --> 00:05:56,160 Speaker 2: we understand around sponsored Instagram posts. But she still ended 106 00:05:56,240 --> 00:05:59,040 Speaker 2: up in legal troubles. So where did she go wrong? 107 00:05:59,120 --> 00:06:01,919 Speaker 2: And why is the the SEC now involved? 108 00:06:02,440 --> 00:06:05,480 Speaker 3: Well, tagging a paid post as hashtag AD is actually 109 00:06:05,480 --> 00:06:07,720 Speaker 3: only part of what people need to do to stay 110 00:06:07,720 --> 00:06:11,400 Speaker 3: above board according to the US regulations, and the regulations 111 00:06:11,440 --> 00:06:15,839 Speaker 3: here in Australia are relatively similar. The Security and Exchange Commission, 112 00:06:15,920 --> 00:06:19,039 Speaker 3: the SEC, as you said, which regulates American markets and 113 00:06:19,160 --> 00:06:23,719 Speaker 3: protects investors, said that because Kim Kardashian didn't disclose that 114 00:06:23,800 --> 00:06:26,120 Speaker 3: she was paid two hundred and fifty thousand dollars to 115 00:06:26,160 --> 00:06:31,680 Speaker 3: promote this cryptocurrency, she was still hiding important information from investors. Now, 116 00:06:31,720 --> 00:06:34,559 Speaker 3: even though she identified it as an AD. Without knowing 117 00:06:34,640 --> 00:06:38,120 Speaker 3: how much Kim Kardashian was paid, people couldn't really discern 118 00:06:38,240 --> 00:06:41,240 Speaker 3: if her promotion was biased or genuine, whether she actually 119 00:06:41,240 --> 00:06:44,880 Speaker 3: believed in the financial product, so they themselves were at 120 00:06:44,960 --> 00:06:47,800 Speaker 3: risk of making a financial decision without the full picture. 121 00:06:48,000 --> 00:06:51,320 Speaker 2: Okay, So influencers posts bumps of content all the time. 122 00:06:51,480 --> 00:06:53,800 Speaker 2: You and I see it every single day, and I 123 00:06:53,839 --> 00:06:56,599 Speaker 2: don't think that I've seen invoices attached to ads for 124 00:06:56,640 --> 00:07:00,520 Speaker 2: things like care vitamins or food delivery services before. What 125 00:07:00,640 --> 00:07:02,400 Speaker 2: makes this situation so different? 126 00:07:02,920 --> 00:07:04,800 Speaker 3: I think we get into new territory when we talk 127 00:07:04,839 --> 00:07:08,600 Speaker 3: about financial products. It's very different to buying a hair 128 00:07:08,680 --> 00:07:12,440 Speaker 3: vitamin on Kim Kardashian's recommendation. It's more than just buying 129 00:07:12,440 --> 00:07:14,680 Speaker 3: a product that may or may not give you the 130 00:07:14,760 --> 00:07:18,880 Speaker 3: luscious locks that Kim Kardashian has. It's making an investment 131 00:07:18,920 --> 00:07:22,800 Speaker 3: in a volatile internet currency. And consider the fact as 132 00:07:22,840 --> 00:07:25,880 Speaker 3: well that Kim Kardashian's a billionaire in a family of 133 00:07:26,000 --> 00:07:28,600 Speaker 3: multi billionaires, and she's been on our screens in one 134 00:07:28,600 --> 00:07:31,520 Speaker 3: way or another since the early two thousands. Now, it's 135 00:07:31,600 --> 00:07:35,680 Speaker 3: possible that people could take her financial recommendation seriously because 136 00:07:35,720 --> 00:07:38,040 Speaker 3: they think of her as a successful business woman and 137 00:07:38,080 --> 00:07:42,040 Speaker 3: because she's so familiar to them as a media personality. Interesting, 138 00:07:42,160 --> 00:07:44,240 Speaker 3: and this is kind of what the chair of the SEC, 139 00:07:44,400 --> 00:07:47,680 Speaker 3: Gary Gensler said. He said, this case is a reminder 140 00:07:47,880 --> 00:07:52,280 Speaker 3: that when celebrities or influencers endorse investment opportunities, it doesn't 141 00:07:52,280 --> 00:07:55,400 Speaker 3: mean that those investment products are right for all investors. 142 00:07:55,800 --> 00:07:58,440 Speaker 2: Okay, So in light of all of that, what action 143 00:07:58,680 --> 00:08:02,880 Speaker 2: has the SEC t Haiken to actually penalize Kim Kardashian 144 00:08:02,960 --> 00:08:06,720 Speaker 2: for not disclosing that two hundred and fifty thousand dollars mark. 145 00:08:06,840 --> 00:08:08,800 Speaker 3: Well, instead of the case getting to the point where 146 00:08:09,000 --> 00:08:12,440 Speaker 3: financial penalty was imposed by a court, Kim Karashian and 147 00:08:12,480 --> 00:08:15,200 Speaker 3: the SEC settled the charges this week, which is also 148 00:08:15,600 --> 00:08:19,080 Speaker 3: really common in situations like this. Kim Kardashian is on 149 00:08:19,120 --> 00:08:22,000 Speaker 3: the hook for over a million US dollars in penalties, 150 00:08:22,200 --> 00:08:25,560 Speaker 3: and she'll have to cooperate with the SEC's ongoing investigation 151 00:08:25,720 --> 00:08:28,560 Speaker 3: into the case. She won't face court over it, but 152 00:08:28,680 --> 00:08:31,440 Speaker 3: she also won't be allowed to advertise any crypto for 153 00:08:31,480 --> 00:08:32,760 Speaker 3: the next three years. 154 00:08:33,080 --> 00:08:36,040 Speaker 2: This is obviously a big story just because it contains 155 00:08:36,120 --> 00:08:40,360 Speaker 2: Kim Kardashian and contains cryptocurrency. Have there been any other 156 00:08:40,480 --> 00:08:44,720 Speaker 2: influencers who have been in trouble over advertising crypto? Based 157 00:08:44,760 --> 00:08:47,640 Speaker 2: on the number of spam comments we get on any 158 00:08:47,679 --> 00:08:49,480 Speaker 2: post with crypto. I imagine there are many. 159 00:08:49,559 --> 00:08:51,240 Speaker 3: I like to play a game with our spam comments 160 00:08:51,280 --> 00:08:53,000 Speaker 3: where I can see how fast I can delete them 161 00:08:53,040 --> 00:08:56,480 Speaker 3: after they pop up fast enough. No so, last year 162 00:08:56,760 --> 00:09:00,600 Speaker 3: an esports organization called Phase Clan got into hot order 163 00:09:00,720 --> 00:09:03,520 Speaker 3: when four of its members encourage their fans to invest 164 00:09:03,600 --> 00:09:07,000 Speaker 3: in a particular cryptocurrency. Now it turns out that those 165 00:09:07,080 --> 00:09:10,560 Speaker 3: people had personal interests in the currency Surprise Surprise, so 166 00:09:10,640 --> 00:09:13,360 Speaker 3: they'd benefit from their fans buying in and at the 167 00:09:13,400 --> 00:09:16,760 Speaker 3: beginning of the year, the Spanish government enacted new regulations 168 00:09:16,800 --> 00:09:20,520 Speaker 3: affecting influences and companies who promote crypto. These new rules 169 00:09:20,520 --> 00:09:23,440 Speaker 3: in Spain mean influencers have to include risk warnings on 170 00:09:23,480 --> 00:09:26,120 Speaker 3: any post, which I think is a pretty good idea, 171 00:09:26,280 --> 00:09:29,240 Speaker 3: and they also have to notify a central agency at 172 00:09:29,280 --> 00:09:31,839 Speaker 3: least ten days before they launch the crypto ad. 173 00:09:32,440 --> 00:09:35,720 Speaker 2: It'll be interesting to see which other types of influencers 174 00:09:35,760 --> 00:09:39,319 Speaker 2: are targeted by government authorities I guess over their sponsored 175 00:09:39,360 --> 00:09:40,520 Speaker 2: content in the future. 176 00:09:40,720 --> 00:09:44,480 Speaker 3: I really think crypto and influencers can only really end 177 00:09:44,600 --> 00:09:47,600 Speaker 3: in bad news, and it'll be really interesting to see 178 00:09:47,600 --> 00:09:51,200 Speaker 3: if there's any further consequences for the Kardashians. I'll be 179 00:09:51,240 --> 00:09:52,640 Speaker 3: keeping an eye on this story, so I think you 180 00:09:52,679 --> 00:09:55,120 Speaker 3: can say I'll be keeping up with the Kardashians. 181 00:09:55,360 --> 00:09:58,199 Speaker 2: God, welcome back. Been waiting a long time for that one. 182 00:09:58,240 --> 00:10:00,720 Speaker 2: But thank you for joining us on the Daily Oz. 183 00:10:01,080 --> 00:10:03,520 Speaker 2: If you learned something from today's episode, don't forget to 184 00:10:03,559 --> 00:10:06,200 Speaker 2: hit subscribe so there's a TDA episode waiting for you 185 00:10:06,320 --> 00:10:08,880 Speaker 2: every weekday morning. Have a great day, and we'll be 186 00:10:08,920 --> 00:10:13,960 Speaker 2: back again tomorrow morning.