I suppose there are some people — there might be one person — maybe there isn’t, I don’t know — whose social media consumption is mainly:
- Kim Kardashian’s Instagram, and
- US Securities and Exchange Commission Chair Gary Gensler’s YouTube channel.
Like, sure, why not. You like Kim Kardashian, but you also want to keep up on the latest trends in securities enforcement. If this is you, then last June you will have gotten Kim Kardashian’s Instagram story promoting EthereumMax, a piece of absolute crypto nonsense that is now trading at $0.000000004229. And then today you will have seen Gensler’s YouTube video that “cautions investors not to make investment decisions based solely on the recommendations of a celebrity or influencer.” “Ah well,” you will say to yourself, “shame I put my life savings into EthereumMax on Kim Kardashian’s recommendation, but at least now I know not to do it again.” The system worked, for you, though with a delay that turned out to be pretty material. (The time to warn you not to buy crypto based on Kim Kardashian’s touting was before she touted crypto.)
But you’re an unusual case. Kardashian has 331 million Instagram followers. As of 9:30 a.m. today that Gensler video had fewer than 1,000 views. There is a reason that she can get paid $250,000 per post to promote the purest possible crypto nonsense, despite the SEC’s counter-programming.
The Securities and Exchange Commission today announced charges against Kim Kardashian for touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion. Kardashian agreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate with the Commission’s ongoing investigation.
The SEC’s order finds that Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens, the crypto asset security being offered by EthereumMax. Kardashian’s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.
“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. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
I would have been stronger there? I do not give investing advice around here, but a reasonable rule of thumb is “when celebrities or influencers endorse investment opportunities, especially crypto asset securities, that definitely means that those investment products are wrong for all investors”? Like, who was EthereumMax right for? Also, when celebrities and influencers endorse a crypto thing you’ve never heard of, it definitely means they got paid to do it? Honestly if you get an Instagram post from an influencer promoting a crypto thing and not disclosing that she was paid for it, the investment opportunity is to send a whistleblower letter to the SEC. Maybe they’ll pay you for pointing it out.