The SEC busts Kim Kardashian over EthereumMax, pour encourager les autres
Kardashian is even studying law. She passed the first-year “baby bar” exam in December 2021, on her fourth attempt. (This isn’t unusual — the pass rate is around 21%.) [The Guardian; Elle]
But that doesn’t mean she understands securities laws — or that putting “#ad” on the end of an Instagram post promoting a security does not, in fact, leave you in the clear.
Section 17(b) of the Securities Act specifically states that you need to spell out how much you’re being compensated for a promotion — and Kardashian neglected that bit when she posted about EthereumMax (EMAX) to her 225 million Instagram followers on June 16, 2021.
How could Kardashian have known EthereumMax was a security? Paragraphs 6 to 9 of the SEC order against her detail how blatant EMAX was. Kardashian’s post even promoted a token burn that was supposedly “giving back” to the “community” — implying financial benefit. [SEC press release; Order, PDF]
The SEC came down hard on Kardashian. She has agreed to a $1 million fine, and disgorgement of the $250,000 she was paid plus $10,415.35 in prejudgment interest. Kardashian must not promote a “crypto asset security” in the next three years. She will also “continue to cooperate with the Commission’s investigation in this matter.”
