The fallout from cryptocurrency's ultimately disastrous rise during the pandemic continues: Kim Kardashian was charged by the Securities and Exchange Commission with illegally promoting a token and agreed to pay the regulator $1.26 million in a settlement.
The charges, announced by the SEC on Monday, concern Kardashian's promotion of a cryptocurrency called EthereumMax (not to be confused with Motherboard's own Bitcoin Max Horsepower) on Instagram. Last year, Kardashian posted a Story claiming that it was "not financial advice" but nonetheless encouraged her 221 million followers at the time to purchase EthereumMax. The crypto actually runs on top of Ethereum—rather than being a copy of Ethereum, with tweaks—leading even crypto trade publications to wonder, "Why?"
We now know why, going by the SEC's charges against the pop culture titan: According to the regulator, Kardashian was paid $250,000 to promote EthereumMax, which she did not disclose to her followers in violation of the law.
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"This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn’t mean that those investment products are right for all investors," said SEC Chair Gary Gensler in a statement. "We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals."
Gensler posted a tweet announcing the charges along with a video raising awareness about promotional schemes. The tweet currently has nearly 2,000 retweets and over 7,000 likes.
Kardashian settled with the SEC without admitting or denying the charges laid against her, according to the regulator.
The charges and settlement may well be a reminder to the many, many, many celebrities at all levels of popularity who promoted cryptocurrencies at the height of their popularity, when prices soared before largely—and painfully—coming right back down to Earth. While many influencers are careful to note when a promotion is in fact a paid ad, Motherboard's own investigation revealed a freewheeling world of shilling where almost anything goes.