Kim Kardashian Faces $1 Million Fine for EthereumMax Crypto Promo

  • Kim Kardashian paid $1.26 million to settle a suit over her endorsement of EthereumMax (EMAX-USD)
  • It’s part of a general crackdown against crypto coin advertising.
  • Celebrities can sell a product or the idea of stock investments, but not stock in Coca-Cola (KO).
Kim Kardashian crypto - Kim Kardashian Faces $1 Million Fine for EthereumMax Crypto Promo

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Celebrity socialite Kim Kardashian agreed to pay $1.26 million for not disclosing a $250,000 payment to push a crypto token called EthereumMax (EMAX-USD).

The settlement, disclosed by the U.S. Securities and Exchange Commission (SEC), includes a $1 million fine plus a $260,000 disgorgement of her payment (including interest).

It’s the latest step in an SEC crackdown on crypto, which is distinguishing between celebrity endorsement of exchanges and those of specific coins.

Kim Kardashian Crypto: What’s Going On?

EthereumMax began trading in 2020 and has never been worth more than a fraction of a cent. It was recently trading at $0.000000004233.

Investors filed a class action lawsuit in January over Kardashian’s endorsement, along with that of boxer Floyd Mayweather, who took EthereumMax tokens as payment for tickets to one of his fights.  Kardashian tried to be cagey in her own endorsement, writing on Instagram, “This is not financial advice but sharing what my friends just told me.”

The SEC has been campaigning against what it calls “pump and dump” crypto schemes. Last week it filed suit against two firms that said they had gold bullion to back a coin called Dignity (DIG-USD). Crypto executives have said the agency is “trying to destroy” their industry with lawsuits calling coins unregistered securities.

But the agency hasn’t had things all its own way. Courts have sometimes ruled that the coins aren’t securities, taking them out of the SEC’s jurisdiction. The Commodities Futures Trading Commission (CFTC) has also sought to be the crypto regulator, which industry observers consider bullish for the sector.

Several exchanges ran ads during the Super Bowl, with celebrity pitchmen like LeBron James, Larry David, and Matt Damon.

The SEC has been looking into celebrity crypto endorsements for five years, taking action against those endorsing specific coins but no action against those endorsing exchanges.

What Happens Next?

Celebrities go where the money is, and with most crypto coins selling for a fraction of their price at the start of 2022, they’re going elsewhere.

The rule should be simple. You can pitch Coca-Cola (NYSE:KO), you can pitch a stock exchange, but you can’t pitch Coca-Cola stock.

On the date of publication, Dana Blankenhorn held no positions in any companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com, tweet him at @danablankenhorn, or subscribe to his Substack.


Article printed from InvestorPlace Media, https://investorplace.com/2022/10/kim-kardashian-faces-1-million-fine-for-ethereummax-crypto-promo/.

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