SEC Fines Kim Kardashian But That Won’t Stop Influencer ‘Pump And Dumps’

SEC Press Release

On October 3, 2022 the US Securities and Exchange Commission announced that they charged popular influencer Kim Kardashian with promoting a crypto asset (EMAX token) without disclosing to her audience that she was being paid to voice her support. The full press release from the SEC can be found at: https://www.sec.gov/news/press-release/2022-183

EthereumMax (EMAX) value as of October 4, 2022 on CoinMarketCap.com was trading at around 0.000000005427 USD.

What Was The Charge

The charge by the SEC was that on her Instagram account she advertised to potential investors to acquire a cryptocurrency token called EMAX. These types of promotions are only allowed under current SEC rules if the person promoting the asset discloses any payments they received for promoting an investment.

What Was The Penalty

The SEC charged Kim with not disclosing that she was paid $250,000 to publish the Instagram post promoting the cryptocurrency. The SEC and Kim came to a settlement where she paid $1.26 million in penalties, disgorgement (the initial $250,000 and interest), and that she would cooperate with the SEC in the investigation.

Why The Penalty Is Ineffective At Curbing This Behavior

Kim is a very wealthy individual and although to most people the financial punishment seems to fit the crime you have to remember that the publicity of this charge increased both the visibility of Kim and the EMAX token. It’s great that Kim will probably no longer post about crypto but the people that took her investment as a sign of future riches are once again left holding the bag due to the actions of the wealthy.

At at the most basic level by “settling” with the SEC and paying a fine that normal US citizens could never cover Kim gets to pay the penalty without ever officially admitting or denying being guilty of the charge. These kind of legal loopholes that allow you to buy your way out of a guilty verdict is what’s going to keep this kind of shady activity a threat to innocent investors.