Crypto KOL disclosure rules

The rules that apply to paid crypto posts

If you pay someone to post about your token, four sets of rules can apply at once. US advertising law through the FTC, US securities law through the SEC, the UK financial promotions regime if any of your audience is in the UK, and EU rules under MiCA if you are marketing to EU residents. On top of those, X and YouTube have their own disclosure requirements, and breaking a platform rule gets the post removed even when the law was satisfied.

The responsibility is shared. The KOL can be charged for failing to disclose, and the project can be charged for the promotion itself. Both of those have already happened in crypto.

FTC endorsement guides

The FTC updated its Endorsement Guides in June 2023. The core requirement did not change: if there is a material connection between the endorser and the brand, it has to be disclosed clearly and conspicuously. A material connection includes cash, tokens, free NFTs, early allocations, a referral cut, or anything else of value, including an ongoing personal or business relationship.

What the 2023 update clarified is worth knowing because most crypto disclosure failures happen in these gaps.

• The disclosure has to be hard to miss. Burying #ad at the end of a long caption, in a block of hashtags, or behind a "more" link does not count.
• For video, the disclosure should be both spoken and on screen, because some viewers have the sound off and some are not watching the screen.
• Platform disclosure tools on their own may not be enough. Using YouTube's paid promotion checkbox is good, but the FTC expects the endorser to say it as well.
• The disclosure must be in the same language as the endorsement.
• Advertisers can be liable for what their endorsers do, which means the project cannot blame the KOL and walk away.
• The guides cover virtual influencers and AI-generated endorsers, which matters for the growing number of anonymous crypto accounts.

Fake or incentivised reviews are handled separately. The FTC's rule on consumer reviews and testimonials, finalised in 2024, allows civil penalties for buying fake reviews and for suppressing negative ones.

SEC enforcement against crypto promoters

The SEC's position is that if a token is a security, promoting it for compensation without disclosing that compensation violates Section 17(b) of the Securities Act, the anti-touting provision. The cases below are the ones every crypto marketer should know, because they set the price of getting it wrong.

Date	Who	What happened	Amount
November 2018	Floyd Mayweather Jr.	Promoted the Centra Tech ICO and other ICOs without disclosing payments, including $100,000 from Centra Tech	$614,775 in penalty, disgorgement and interest
November 2018	DJ Khaled	Promoted the Centra Tech ICO without disclosing a $50,000 payment	$152,725 in penalty, disgorgement and interest
October 2022	Kim Kardashian	Posted about EthereumMax on Instagram without disclosing the $250,000 she was paid	$1.26 million, and a three-year agreement not to promote crypto asset securities
March 2023	Eight celebrities promoting Tron and BitTorrent tokens	Charged with touting TRX and BTT without disclosing compensation, alongside charges against Justin Sun	More than $400,000 combined from those who settled

The March 2023 group included Lindsay Lohan, Jake Paul, Soulja Boy (DeAndre Cortez Way), Lil Yachty (Miles Parks McCollum), Ne-Yo (Shaffer Smith), Akon (Aliaune Thiam), Austin Mahone and Kendra Lust (Michele Mason). All of them settled except Soulja Boy and Austin Mahone.

Two details matter for how you run campaigns. First, the SEC charged the promoters even where the amounts were small, so there is no threshold below which this is ignored. Second, in the Kardashian case the payment was a single post. The size of your KOL deal does not protect you.

UK rules for crypto promotions

The UK financial promotions regime for qualifying cryptoassets came into force on 8 October 2023, and it is stricter than anything in the US. A crypto promotion aimed at UK consumers must be communicated or approved by an FCA-authorised firm, or communicated by a cryptoasset business registered with the FCA under the money laundering regulations. Communicating an unapproved financial promotion is a criminal offence in the UK, carrying up to two years' imprisonment.

The regime brings specific requirements that most crypto KOL posts fail.

• A prescribed risk warning has to appear with the promotion.
• Incentives to invest are banned, which kills refer-a-friend bonuses and new-user crypto bonuses aimed at UK consumers.
• First-time investors with a firm get a 24-hour cooling-off period.
• Consumers have to be categorised and go through an appropriateness assessment.

The FCA has published lists of firms that appear to be promoting illegally, and it has warned influencers directly. If a meaningful share of a KOL's audience is in the UK, either get the promotion approved properly or exclude the UK, and put that in writing with the KOL.

EU rules under MiCA

MiCA, Regulation (EU) 2023/1114, applied to crypto-asset service providers from 30 December 2024. Article 7 covers marketing communications for offers of crypto-assets other than asset-referenced tokens and e-money tokens. It requires that marketing communications are clearly identifiable as marketing, that the information in them is fair, clear and not misleading, that it is consistent with the crypto-asset white paper, and that the communication states a white paper has been published and gives the address where it can be found, along with contact details for the offeror.

Marketing communications also have to be notified to the competent authority on request, and the rules sit alongside national consumer protection and advertising law. In practice this means a paid KOL post promoting an EU token offer needs the white paper link in the post itself, not just on the website.

Platform rules on X, YouTube and the rest

• X: X offers a paid partnership label that some accounts can apply to a post, but most crypto KOLs disclose in the post text instead. Either way the post needs visible words such as #ad, "sponsored" or "paid partnership" near the start, not buried in a hashtag block. X also restricts financial services advertising through its ads product, which is separate from organic KOL posts.
• YouTube: creators must tick the "includes paid promotion" box in video settings, which shows a disclosure overlay at the start of the video. YouTube's own policy requires this, and the FTC expects a spoken disclosure on top of it.
• TikTok: the branded content toggle is mandatory for paid posts, and TikTok's advertising policies restrict financial products, so crypto videos get removed regularly.
• Telegram and Discord: no built-in disclosure tools, so the text has to carry it. Put the disclosure in the message itself and in any pinned post.

What a compliant post looks like

A compliant post is boring and that is fine. The parts you need are the disclosure, the risk language, and honest claims.

• Start the post with the disclosure. "Paid partnership with [Project]" or "#ad" as the first thing the reader sees.
• Say what the compensation was if tokens were involved, because token compensation creates an ongoing interest that a one-off "#ad" does not convey. "I was paid in [TOKEN] and I hold a position" is the safest version.
• No price predictions, no "guaranteed", no "risk-free", no "next 100x". These are the claims that turn an advertising problem into a securities problem.
• Include a risk line. "Crypto assets are volatile and you can lose your money. This is not financial advice."
• For video, say the disclosure out loud in the first few seconds and show it on screen at the same time.
• For EU-targeted promotions, link the white paper. For UK-targeted promotions, use the prescribed risk warning or exclude the UK.

What the KOL contract should require

Most disclosure failures are contract failures. The clauses below should be in every agreement, and they overlap with the wider list in our KOL contract terms guide.

• Mandatory disclosure wording. Specify the exact text and where it goes in the post. Do not leave it to the KOL's judgement.
• Platform tools. Require the YouTube paid promotion checkbox, the TikTok branded content toggle and any X label to be switched on.
• No prohibited claims. List them: no price targets, no returns promises, no "guaranteed" or "risk-free", no claims about the project that are not in the approved brief.
• Geographic carve-outs. State whether the promotion may target UK or EU audiences and who is responsible if it does.
• Token lockups and sale disclosure. If you pay in tokens, set a vesting schedule and require the KOL to disclose sales, so you are not surprised when they exit into your holders.
• Takedown and correction rights. You need the right to require an edit or removal within a set number of hours, and the KOL should not delete the post early without agreement.
• Indemnity and insurance. The KOL indemnifies you for regulatory claims arising from their own non-compliance, and you indemnify them for the accuracy of the material you supply.
• Record keeping. Require a screen recording of analytics and a copy of the published post, kept for at least two years, because that is the evidence you will need if a regulator asks.

Disclosure discipline also filters out the worst counterparties. A KOL who refuses to label a post is telling you their audience does not know they are being sold to, which is a warning sign covered in our KOL scams and red flags guide. If you want the compliance side handled as part of the campaign, that is included in our KOL marketing service.

None of this is legal advice. Get a securities lawyer to review your campaign if your token could be treated as a security in any market you are promoting into.