Legal Essentials for Fitness Influencers: Navigating the Complexities

In the rapidly expanding world of fitness influencers, understanding and adhering to legal standards is crucial. As influencers transition from fitness enthusiasts to public figures, their legal needs become more intricate and vital to their continued success and brand integrity.

Intellectual Property Rights. Fitness influencers often create unique workout routines, slogans, and branded content. Protecting this intellectual property is essential to maintain exclusivity and leverage for monetization. Registering trademarks for brand names or catchphrases can safeguard an influencer’s business assets.

Contract Law. Influencers frequently engage with brands for endorsements and sponsorships. It is important to understand the terms and conditions of these contracts thoroughly. This includes compensation, deliverables, the scope of work, and termination clauses. Professional legal advice can prevent potential conflicts and ensure fair agreements.

Disclosure and Compliance. Influencers must comply with the advertising guidelines set by regulatory bodies such as the Federal Trade Commission (FTC) in the U.S. This includes clearly disclosing any partnerships or sponsorships in their posts to maintain transparency with their audience. Non-compliance can lead to hefty fines and a tarnished reputation.

Liability Issues. Offering fitness advice online can be tricky. Without proper disclaimers, influencers might be held liable for any injuries or damages that occur from followers attempting their routines. It is advisable to clearly state that content is for informational purposes only and not a substitute for professional medical advice.

The intersection of fitness and law may seem overwhelming, but it is indispensable for influencers aiming to build sustainable and compliant brands. Consulting with legal professionals who specialize in digital media and entertainment law can provide the necessary guidance to navigate these waters smoothly.

For fitness influencers, the digital stage is fraught with potential legal issues, but with the right knowledge and support, they can continue to inspire and engage responsibly and profitably.

Resolving Partnership Disputes in the Fitness Industry

In the dynamic fitness industry, partnership disputes can emerge from differences in business vision, management styles, or financial expectations. Effectively resolving these disputes is critical for maintaining the operational health of any fitness business. Here’s how disputes can be navigated through legal strategies:

Negotiating Operating Agreements and Shareholder Agreements

The foundation for preventing and resolving disputes lies in well-crafted operating agreements for LLCs and shareholder agreements for corporations. These documents act as a blueprint for business operations, detailing the distribution of profits and losses, management duties, and dispute resolution mechanisms. Clearly defined rights and responsibilities, coupled with clauses like buyout options or decision-making processes, help mitigate conflicts before they escalate.


Mediation is a preferred strategy for its efficiency and its focus on preserving professional relationships. This process involves a neutral third party who assists the disputing partners in finding a mutually satisfactory resolution. Mediation is informal, cost-effective, and quicker than traditional legal processes, making it ideal for resolving disputes while maintaining ongoing professional relationships within the fitness community.


While often seen as a last resort due to its public nature and potential costs, litigation is sometimes necessary to resolve deep-rooted disputes decisively. For those in the fitness industry facing such scenarios, engaging with a specialized firm like Pastore LLC can provide the expertise needed to navigate complex legal landscapes. With extensive experience in litigation, Pastore LLC offers robust representation, ensuring that clients’ interests are effectively protected and advanced in court.


Similar to litigation but conducted outside of court, arbitration involves resolving disputes through an arbitrator or a panel. It is generally quicker than court proceedings and can be kept confidential, which helps protect the business’s reputation. Many agreements in the fitness industry might mandate arbitration as the method for dispute resolution, emphasizing its role in efficient conflict resolution.

Effective handling of disputes in the fitness industry requires a combination of proactive agreement drafting and strategic use of resolution methods. Whether through mediation or litigation, it is important to address conflicts swiftly and effectively. Firms like Pastore LLC play a crucial role for those needing to pursue litigation, providing expert guidance and representation that aligns with the best interests of the business. In every case, working with legal professionals adept in these areas can help safeguard the longevity and success of your fitness enterprise.

Digital Assets: A Brief Summary of the Current Legal Landscape

Since Bitcoin’s creation in 2009, cryptocurrency and digital assets have skyrocketed in both popularity and value. Today, the global cryptocurrency market cap is roughly $2.78 Trillion.[1] This quick growth has led to people and entities attempting to fraudulently enter the market and perform illegal activities under the guise of a mysterious new asset class. As such, these currencies have received considerable attention from administrative agencies such as the SEC, CFTC, and FTC.

Relevant Supreme Court Cases Relied Upon by the SEC

The 75-year-old Howey test guides courts’ inquiry into allegations of the Securities and Exchange Acts when the SEC finds questionable behavior.[2] Under Howey, an investment contract exists when there is: (1) the investment of money (2) in a common enterprise (3) with a reasonable expectation of profits (4) to be derived from the efforts of others. This test is flexible and may apply to any contract, scheme, or transaction, regardless of whether it has any characteristics of traditional securities.

The Reves test aids Howey in digital asset litigation. Unlike Howey, where clear prongs must be met for an investment contract to be present, Reves lays out factors to balance while considering whether notes are securities. When applying the Reves test, courts “begin with a presumption that every note is a security. From there, the analysis turns on four factors: (1) the motivations of the parties; (2) the plan of distribution of the instrument; (3) the reasonable expectations of the investing public; and (4) whether some factor such as the existence of another regulatory scheme significantly reduces the risk of the instrument.”[3] The SEC has applied this test several times in cease-and-desist orders and has relied on it in recent litigation involving digital assets. Like Howey, Reves is a Supreme Court decision released decades before the emergence of crypto and digital assets.

The SEC acknowledges that tokens, in and of themselves, are not securities. Thus, the appropriate question becomes whether transactions, in which a particular token is implicated, qualify as investment contracts.

Recent and Unfolding Developments

Last year, separate lawsuits brought by the SEC—involving Ripple Labs, Inc. (“Ripple”)[4] and Terraform Labs PTE Ltd (“Terraform”)[5]—resulted in, unsurprisingly, inconsistent results. In Ripple, the Southern District of New York analyzed three types of sales: institutional, programmatic, and “other distributions under written contracts.” The court held that institutional sales of XRP, a cryptocurrency, were investment contracts, and therefore subject to securities regulations. Programmatic sales, however, did not meet the third Howey prong, because it was not certain that buyers had an expectation of profits from Ripple’s efforts. The “other distributions” were given to employees in exchange for consideration other than money, so the court could not find the first Howey prong.

Terraform saw the Southern District of New York rule that three separate currencies were securities based on Terraform’s conduct while advertising the currencies, promised profits, and were responsible for developments that would play a large role in the currencies’ future value. Terraform, decided a few days after Ripple, expressly rejects Ripple’s distinction between secondary markets and direct sales, saying Howey makes no such distinction. The clear divide between courts within the same District is yet another example of how the SEC’s regulation by enforcement is not conducive to innovation or growth within the digital assets market.

The SEC has attempted to strike while the Iron is hot post-Terraform, commencing actions against prominent cryptocurrency platforms Binance, Coinbase and Kraken over the last year. These suits are still unfolding, with hearings set throughout 2024.

Looking at one of the actions brought in the wake of the Ripple and Terraform decisions, the Southern District of New York recently held that the SEC’s action against, among others, Coinbase, Inc. (“Coinbase”) may, for the most part, proceed.[6] The SEC had charged Coinbase with acting as a national securities exchange, a broker, and a clearing agency with respect to transactions in 13 identified crypto assets, which the SEC contended were securities, and of offering and selling securities without a registration statement. Coinbase moved for judgment on the pleadings, arguing that the SEC’s claims should be dismissed, as even if the SEC’s allegations as pleaded were true, they fail to give rise to an entitlement to relief. The Court found that “the SEC has sufficiently pleaded that Coinbase operates as an exchange, as a broker, and as a clearing agency under the federal securities laws, and, through its Staking Program, engages in the unregistered offer and sale of securities.”[7] The Court followed Terraform in not refusing to accept a distinction between secondary markets and direct sales stating,

with specific regard to the Crypto-Assets at issue here, there is little logic to the distinction Defendants attempt to draw between the reasonable expectations of investors who buy directly from an issuer and those who buy on the secondary market. An investor selecting an investment opportunity in either setting is attracted by the promises and offers made by issuers to the investing public. Accordingly, the manner of sale has no impact on whether a reasonable individual would objectively view the issuers’ actions and statements as evincing a promise of profits based on their efforts.[8]

Thus, for now, there remains no clear answer on the status of secondary markets. While this does not mean that the SEC will ultimately be successful in proving the merits of its claims, it does mean that the SEC overcame a huge initial hurdle.

Key Considerations for Developers

While Ripple and Terraform provide thorough inquiries into digital assets as securities, neither are binding precedent nor have they brought clarity to the market. With this in mind, the Howey test remains instructive to assets in the digital assets class, with factual distinctions serving as helpful guides on how an asset may fall within or outside of the definition of a security.

Tangible and definable. The Court’s decision holding Ripple’s “other distributions” fell outside of the realm of a security rested squarely on its failure to satisfy the first prong of the Howey test, as Ripple provided its token in exchange for nonmonetary contributions. Ripple is a rare case where the first Howey element is not met. Providing money in exchange for a currency, though, is usually a straightforward inquiry and typically met.

Commonality of enterprise. Commonality can be found through either horizontal or vertical commonality. Horizontal commonality exists when there is a pooling of assets, usually combined with the pro-rata distribution of profits. Vertical commonality is present when the fortunes of investors are linked with those of promoters. The common theme here is that funds from investors are linked to the company providing the currency itself. On the other hand, Bitcoin and Ethereum are not regulated by securities laws because they do not possess the requisite centralization and are sold exclusively through secondary markets.

Setting expectations of profits. Leading investors to expect financial gain typically comes through the advertising campaign and how the currency is marketed to investors. Guaranteeing a specific return on investment with no hedging language (think “may” return a certain percentage as opposed to “will” return a certain percentage), speaking to how much better a currency is than others, and similar behavior are key cues that lead the average investor to expect a return on investment, likely making the currency a security.

Active participation. A party to the transaction bearing responsibility for the continued development of an asset or exercising continued management or promotion of a network contributes to a reasonable investor’s expectation of a profit derived from the profits of others. This can be important both at the time of investment and after the investment. An investment will be reevaluated at a later date depending on how important the continued efforts are to the asset’s value.

Attachment to an investment. Coins themselves are not securities. They need to be tied to something that may appreciate over time. Additionally, buying something purely for consumptive value may lead to its falling outside of securities laws’ purview.

Companies considering launching digital assets through initial coin offerings or on a decentralized finance platform should be mindful of the factors courts have weighed in recent cases. This area of law is evolving rapidly, and it is essential to stay abreast of developments in current cases and in changes to the regulatory framework. Pastore LLC has securities lawyers with expansive experience in securities litigation, aiding broker-dealers, investment banks, and investment advisers, and can be effective counsel advising clients on digital assets and cryptocurrencies’ status as securities.

[1] Digital Assets, Forbes, (last visited Mar. 30, 2024).

[2] Framework for “Investment Contract” Analysis of Digital Assets, U.S. Securities & Exchange Commission, (last visited Mar. 30, 2024).

[3] SEC v. Genesis Glob. Capital, LLC, No. 23-cv-00287 (ER), 2024 U.S. Dist. LEXIS 44372, at *25-26 (S.D.N.Y. Mar. 13, 2024) (internal quotation marks omitted) (citing Reves v. Ernst & Young, 494 U.S. 56, 65-67 (1990)).

[4] SEC v. Ripple Labs, Inc., 2023 U.S. Dist. LEXIS 120486 (S.D.N.Y. July 13, 2023).

[5] SEC v. Terraform Labs Pte. Ltd., No. 23-cv-1346 (JSR), 2023 U.S. Dist. LEXIS 132046 (S.D.N.Y. July 31, 2023).

[6] SEC v. Coinbase, Inc., 2024 U.S. Dist. LEXIS 56994 (S.D.N.Y. Mar. 27, 2024).

[7] Id. at *105.

[8] Id. at *68 (citing Terraform I, 2023 WL 4858299, at *15).