Kim Kardashian Pays $1.3 Million Fine For Promoting EthereumMax
A while ago, we wrote an article about crypto celebs who were involved in scam projects, specifically on NFT projects. If you have not read it yet, then you should definitely check it out.
Today’s edition covers a crypto asset instead. This time we are talking about a crypto token called EthereumMax. It has nothing to do with Ethereum itself, meaning that it is built on top of Ethereum blockchain like most of the other tokens. As per their whitepaper, their vision is “to build a robust and scalable ecosystem that fully maximizes the power of DeFi, creating a wide range of products for our community that encompasses everything from a deflationary token and a core stablecoin for processing payments to cutting edge NFTs and exclusive events for our community.”
While we are not getting into the details of EthereumMax, all of a sudden it became topic of the day today, not just in a crypto space. Apparently, Kim Kardashian (I am assuming you already know her!) was reached out by EthereumMax’s team in order for her to promote their token on Instagram.
She agreed to promote it on her Instagram profile a while back in exchange for $250k. Apparently, SEC had an issue with it as Kim Kardashian failed to inform her followers that this was a promotion and she was getting compensated from this promotion.
The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion. Hence, she got fined with $1 million as a penalty and $260k disgorgement of the initial payment for the promotion she received (the $250k + interest accrued).
Why this is an issue, so what that she promoted a coin?!
Well, it is expensive to be a celebrity. You have more burden on your shoulders and of course regulators will keep an eye on you because of the impact you might have. Just think about it, Kim has a bigger follower base on Instagram than United States Population!
Obviously this is a joke for Kim. Her net worth is roughly $1.8 billion as she has built an empire around her. It is considered that she gets around $220k per day, so you can only imagine, it will take her a week to pay it off. Yet you have a hard time paying next month’s rent. Bruuuh..
Based on the Press Release from SEC (see here), Kim agreed that she will not be promoting any crypto asset security for three years. She also agreed to continue the cooperation with SEC for the ongoing investigations about the project.
While on this topic, SEC created a YouTube video today on the same topic where celebs promote projects. This time the Chairman of SEC, Gary Gensler got featured on the video where he stated that everyone should do their own research before getting involved in any project. Check out the video below.
Is that it for today?
Well, again a friendly reminder when dealing with cryptos promoted by celebs:
Most of those crypto celebs shill a lot of projects and not just one. Remember, they are involved in that project, whether that is a % stake in the project or a paid promotion. They are getting rich from that specific project, whether it fails or not. If it fails, they move on to the next project. Internet forget things quickly. If you were smart enough to due diligence on their behavior, you would figure out that projects they were involved are dead already, yet they are shilling a new one. If previous projects are completely abandoned, guess what..the new one will be abandoned too. It is people like you who believe them again that makes them money.
Cheers!
