Some pointed out the regulator’s supposed hypocrisy, others told crypto-influencers to lawyer up, whilst a few poked fun at the reality TV star.
The crypto community reacted with a mix of disbelief and amusement after reality star Kim Kardashian was fined for promoting the cryptocurrency EthereumMax (EMAX).
The United States Securities and Exchange Commission (SEC) fined Kardashian $1.26 million on Oct. 3, for “touting on social media” about the EMAX without disclosing she was paid $250,000 to post about it.
Kardashian has neither admitted to nor denied the SEC’s allegations, but settled the charges and agreed to not promote any cryptocurrency assets until 2025.
SEC chairman Gary Gensler tweeted the fine was a reminder that celebrity endorsement of investment opportunities doesn’t “mean those investment products are right for all investors.”
Today @SECGov, we charged Kim Kardashian for unlawfully touting a crypto security.
This case is a reminder that, when celebrities / influencers endorse investment opps, including crypto asset securities, it doesn’t mean those investment products are right for all investors.
— Gary Gensler (@GaryGensler) October 3, 2022
Following Gensler’s tweet, the online crypto community expressed their thoughts on the fine, with some calling out the SEC for its inconsistent enforcement decisions.
Economist Peter Schiff, known for his anti-Bitcoin (BTC) stance, pointed out what he perceived was an unfair targeting of Kardashian as the SEC hasn’t fined MicroStrategy co-founder Michael Saylor who he believes has “more to gain pumping crypto.”
The SEC is fining @KimKardashian $1.2 million for pumping #crypto. What about the real pumpers? @Saylor had much more to gain pumping crypto than Kim. Or @CNBC paid millions for ads by crypto companies, then pumping #Bitcoin non-stop while providing industry pumpers with airtime?
— Peter Schiff (@PeterSchiff) October 3, 2022
Saylor responded saying Bitcoin isn’t a security but a commodity and its promotion would be “similar to promoting steel…or granite” and the coin’s open protocol offers “utilitarian beliefs similar to roads.”
Crypto-personality and author Layah Heilpern shared she believed “the SEC has bigger issues closer to home it should probably focus on…” likely inferring the widely held belief in the community that certain U.S. politicians have inside traded.
The SEC will go after Kim Kardashian for shilling a crypto but not Nancy Pelosi for insider trading her way to a hundred million dollars https://t.co/i0bZKjaxjJ
— Dr. Parik Patel, BA, CFA, ACCA Esq. (@ParikPatelCFA) October 3, 2022
Pseudonymous developer 0xBender noted a contrast between the SEC’s heavy-handed treatment of crypto promotions from celebrities, while crypto-centric influencers “have been out here shilling you garbage for 0.2 ETH (Ethereum) a tweet.”
The SEC is charging Kim Kardashian with unlawfully promoting a crypto security while influencers have been out here shilling you garbage for 0.2 ETH a tweet
— bender (@0xBender) October 3, 2022
Others such as former federal prosecutor Renato Mariotti said influencers thinking to endorse cryptocurrencies should “take note” as the regulator is showing it will “aggressively pursue enforcement actions” and those who promote crypto without considering the laws will “need to find a good lawyer.”
Kim Kardashian presented a very tempting target for the SEC.
Because of this case, millions of people who didn’t know much about the SEC now know about it.
As an aspiring lawyer, she had every incentive to cooperate. Other celebrity crypto endorsers should take note. https://t.co/3mvMNQOxvg
— Renato Mariotti (@renato_mariotti) October 3, 2022
Meanwhile, Ethereum educator and investor Anthony Sassano told his followers he believes the SEC targeted Kardashian because it creates the illusion the regulator is “doing something” about crypto scams, and suggested it should’ve targeted the creators of EMAX instead.
They went after Kim Kardashian because she makes a good headline and it shows the public that the SEC is “doing something” about crypto scams
In reality, the fine she paid is dust to her, the creators of Ethereum Max haven’t been fined (yet?), and the victims are all still rekt
— sassal.eth (@sassal0x) October 3, 2022
Still, some saw the lighter side of investing in a tumultuous and highly speculative crypto token, with journalist Tyler Conway saying the star “got the full crypto experience” by losing more money than she’d been paid.
Self-described hacker and tech content creator Marcus Hutchins said Kardashian “would have gotten better returns” in EthereumMax as it’s down 97% since her post, compared to the -80% the promotion returned for her.
Kim Kardashian got paid $250k to promote Ethereum Max then lost $1.3m of that to an SEC fine. Would have gotten better returns just investing in Ethereum MAX, which is down 97% since her post.
— Marcus Hutchins (@MalwareTechBlog) October 3, 2022