Today, on October 3, Kim Kardashian launches a podcast about criminal justice reform called The System. Also on today, October 3, justice has been administered to cybercriminal Kim Kardashian. The Securities and Exchange Commission announced that it has charged the law student a total of $1.26 million in “penalties, disgorgement, and interest†for failing to disclose that she was paid $250,000 to promote the crypto asset security EthereumMax on her Instagram. The SEC notes that her post “contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.†By doing this, Kardashian was actively participating in what can be considered a “pump-and-dump†scheme, in which celebrities artificially inflated the value of the asset so that the people behind it could cash out, sending its price plummeting and causing investors to lose a reported 98 percent of the value on their investment. One surefire way to tell the venture was scammy: It had nothing to do with Ethereum but used its name to lend it legitimacy by association.
“The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion,†said Gurbir S. Grewal, director of the SEC’s division of enforcement in an official press release. “Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.†Kardashian was charged with a $1 million penalty, plus she was made to pay the SEC the $250,000 she made off the Instagram post with an extra $10,000 in interest. She also agreed to abstain from promoting any crypto asset securities for three years. Anyway, good luck with the podcast girlina!