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The reality show has been called to order by reality. In the cryptocurrency world, “there's only one step from the sublime to the ridiculous.
Kim Kardashian, the planetary star has learned this the hard way. She was indeed pinned by the American market regulator, the Securities and Exchange Commission (SEC). Kim Kardashian will pay a fine of 1.26 million dollars for promoting an obscure cryptocurrency, EthereumMax, without disclosing that she was paid 250,000 dollars for this advertising.
Today, Kim Kardashian can get paid up to $1 million for a commercial on Instagram. In 2019, the rates were $300,000 to $500,000 per post. Kim Kardashian, 41, pledges not to promote any cryptocurrency investments for three years. She is bound to the utmost reserve in the press and on social networks.
What she did not do on June 13, 2021, when she had attracted the attention of her 251 million followers on Instagram (today they are 331 million).
Guys, are you interested in cryptos?” she asked, urging them to join “the EthereumMax community.” She clarified that this was “not financial advice but sharing what my friends have told me about the EthereumMax token.
A survey by Morning Consult revealed that nearly half of crypto holders in the United States had heard about this disguised advertisement at the time.
99.9% drop for EthereumMax
This crypto had no connection whatsoever with Ethereum, the second largest cryptocurrency behind Bitcoin, but played on ambiguity. A week after this global publicity, its price had plunged by 85%. EthereumMax has a price of $0.000000004301 today, a 99.9% drop since its May 30, 2021 high.
Did the cryptocurrency promoters use Kim Kardashian's notoriety to sell their tokens to everyone who was seduced by this real fake promotion?
SEC Chairman Gary Gensler reiterated that “when celebrities/influencers endorse investment opps, including crypto-asset securities, it doesn’t mean those investment products are right for all investors.
This $1.26 million fine represents less than 0.1% of Kim Kardashian's fortune, estimated at $1.8 billion by Forbes. We can therefore find this fine far too light and say that it is almost an incentive to start again …
By settling this case and cooperating with justice, Kim Kardashian hopes to thwart the class action complaint filed earlier this year by individuals who felt ruined by their investments in EthereumMax. They invested in the cryptocurrency between May 14 and June 27, 2021. It seeks to distance itself from a case with the scent of an embarrassing scam.
The agreement that Kim Kardashian has reached with the SEC allows her to move forward with her many other business activities,” her spokesperson told the New York Post. In September 2022, the reality TV and social media star partnered with a former US fund Carlyle to launch her company in private equity, SKKY Partners.
Will she invest in cryptocurrencies, and in EthereumMax, which she was urging her followers in 2021? This has not been made clear at this time.
As always with these types of dubious stories, you should keep in mind the only rule of thumb when it comes to investing: if it looks remotely like a scam, then it is a scam. Run away!
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