Kim Kardashian and the celebrity crypto con: New fine, old bottle
By Adam Lashinsky
The Washington Post
October 5, 2022 at 4:58 p.m. EDT
The Securities and Exchange Commission slapped Kim Kardashian on her gilded wrists this week for illegally touting a newfangled cryptocurrency. The $1.26 million price for her transgression — not telling her fans that she had been paid $250,000 for hyping an investment vehicle — is evidence the government is taking halting steps to regulate a seemingly cutting-edge form of financial services. At the same time, Kardashian’s con artistry is the latest chapter in a decades-old story of famous people profiting by pushing products on the rubes who love them.
From a securities-law standpoint, that Kardashian was promoting an esoteric crypto token called EMAX is irrelevant. Her violation was a sin of omission: not disclosing, as required under the law, to her then-225 million Instagram followers that she was on the take. She agreed to pay back her fee, with interest, plus a $1 million fine. That’s surely a rounding error to her, and she didn’t have to say she had done anything wrong.
But it’s noteworthy that the staid regulator went after Kardashian for hyping a cryptocurrency, instead of a more prosaic investment scam. SEC chief Gary Gensler has been engaging in extended skirmishes with a fledgling industry that is pushing the notion of “decentralized finance.”
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