A-list celeb Kim Kardashian will have to fork over $1.26 million to the Securities and Exchange Commission (SEC) after she was charged with unlawfully shilling a dodgy crypto token to her more than 200 million Instagram followers.
Last year, Kardashian joined the likes of Jake Paul and Floyd Mayweather Jr in promoting a crypto asset called EMAX when she gushed to her followers: “Are you guys into crypto???? This is not financial advice but sharing what my friends just told me about the Ethereum Max token!”
She followed up with: “A few minutes ago Ethereum Max burned 400 trillion tokens — literally 50% of their admin wallet giving back to the entire E-Max community.”
This may have sounded great at the time to some, however, earlier this year, the token was shown to be just another pump and dump.
Kim’s promotion of EMAX failed to properly disclose her involvement with the project, specifically a payment of $250,000 from EthereumMax, the token’s provider.
Her punishments, announced today, include:
- A three-year ban on promoting any crypto assets,
- A $1,000,000 penalty,
- $260,000 in disgorgement.
Officials said: “Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”
EMAX closely resembled SafeMoon, a similar token that’s been embroiled in its own controversies, including a $12 million pump and dump scheme perpetrated by a famous YouTuber. After the celebrity promotions, EMAX pumped by more than 1,000% before shedding more than 99% of its original value.
It’s alleged that Ethereum max co-founders, Giovanni Perone and Steve Gentile, unloaded their personal holdings of EMAX before it collapsed to turn a handsome profit.