Kim Kardashian has been fined $1.26 million by the SEC for an absolutely shameless promotion of a cryptocurrency scam to her Instagram followers – who number over 250 million.
She has also agreed not to promote any cryptocurrency for the next three years. Shockingly, however, her lawyers played a blinder and she is not required to admit any wrongdoing.
The settlement has really annoyed me, so I’m about to get a rant off my chest.
What happened?
The incident occurred in July 2021, when Kardashian posted the below to her Instagram.
Ethereum Max – definitely not to be confused with Ethereum – is (was?) an obscure cryptocurrency token that spiked up immensely off the back of Kardashian’s post. I am tempted to use the word scam here, but instead I will be kind and I will instead say “worthless”.
I charted the price action of the token since Kardashian’s promotion. They say a picture tells a thousand words, so here you go:
Turns out, the “cryptocurrency” promoted by Kardashian was launched only a month before her post, and she was paid $250,000 to promote it on Instagram.
Within a week of Kardashian’s post, it was down 70%. Within a month, it was down over 90%. It wasn’t long before it essentially went to zero. Sad.
Kim Kardashian is a predator
It makes my stomach turn to read her post even now, eighteen months on. Kardashian exploited her followers for money, and the language used is abhorrent. “Sharing what my friends told me a few minutes ago” – ye, my friends slip me 250 G’s all the time to make posts on Instagram, Kim.
A massive proportion of Kardashian’s followers are underage. An even bigger proportion idolises her. She gave the seal of approval to what had all the looks of a Ponzi scheme – a copy and paste pump-and-dump of the famous Ethereum.
The anonymous founders of the coin took their chance – as was always planned, one suspects – and immediately dumped on the gullible buyers lured in by Kardashian’s advert.
It is impossible to know how many followers lost money off Kardashian’s post. In truth, I don’t want to know, there is plenty of bad news in the world already. What we do know is that of every dollar that each follower put in, that is now close to zero. By January, when the token had fallen 98% since Kardashian’s investors, she was sued.
How much did Kim get fined?
Obviously, what Kim did was incredibly illegal. You can’t pass off a paid advert for a scam as a personal endorsement.
So, the SEC came calling. Unfortunately, Kim is rich and famous and so, like these things tend to go in the US, she got barely a slap on the wrist. She was fined $1.26 million. To me, this is nowhere near the level of punishment that is deserved, given the shamelessness, greed and cold-hearted nature of the exploitative post.
Kardashian is estimated to be worth $1.8 billion, meaning the fine equates to 0.07% of her net worth. Answer me this – multiply your net worth by 0.07%. Is that number enough to persuade you from repeating a crime? In actuality, it is even less – it is really a $1 million fine and a return of the $250,000 she got paid.
Kardashian’s lawyers told CNN that she “is pleased to have resolved this matter with the SEC.”
“Kardashian fully cooperated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter,” the attorneys added. “She wanted to get this matter behind her to avoid a protracted dispute. The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits.”
She also has not had to admit any wrongdoing. She does have to resist the temptation to again promote such scams for the next three years, however. How people idolise someone like this is beyond me.
I reached out to Kim last year (screenshot above) off, when the token was down 92%, to get her comments. She has yet to reply. Maybe if she hadn’t ghosted me, she wouldn’t have been sued six months later…
The Kardashian brand is ubiquitous, a powerful Gen Z-fuelled money-making machine. This incident won’t affect things at all and has already been brushed under the carpet. But I really don’t understand; there have been celebrities cancelled for far less than this.
How bad a thing did Queen Kim do?
Make no mistake – this is stealing money from her innocent followers. I could somewhat understand it if she was paid a fortune, but what is $250K to a billionaire like Kim?
In ranting about this in my family WhatsApp group, my (Gen Z) sister leapt to the defence of Kim.
“She is so influential and has achieved more than most people”
“She is such a talented entrepreneur”
“Don’t be so dramatic”
This seems to be the defence of most people. And yeah, I agree – she is rich, influential and outrageously successful. And does she care that a nobody like me is ranting about her on the Internet? No, of course she doesn’t.
But I’m not saying she isn’t successful. That is irrelevant. If anything, it exacerbates how bad her crime is given she knew how impressionable her followers were and how influential she was. A quick $250K cheque was all that was needed for her to farm them all out.
As for being dramatic? Well, yeah – as I type this, that may be a fair point. But the individual stories of people investing in this “cryptocurrency” because Kim lied and said her and her friends were involved in it – only to lose every penny and realise that Kim was in fact paid and had never heard of the cryptocurrency, never mind invested in it – is devastating to read.
I’m willing to bet those people would not feel the same if it was their daughter, their son, their friend who lost chunks of their savings, their college fund, their hard-earned cash because their “idol” lied to them.
The only thing more fraudulent than Ethereum Max is the illusion that Kim Kardashian cares about anyone but herself.
Kim, shame on you.