Kim Kardashian is the latest celebrity to land in legal trouble for unlawfully promoting a crypto product to her followers without disclosing details around the payment she had received to do so. The reality star settled with the U.S. Securities and Exchange Commission by paying a $1.26 million penalty for promoting a crypto security sold by EthereumMax.
While the action could be a win for the SEC in terms of stricter enforcement of crypto rules (Chairman Gary Gensler is already crowing about it on Twitter), others rushed to Kardashian’s defense (such as in this since-deleted tweet), arguing the action was unfair because Kardashian is a woman.
Before anyone else jumps to support her, remember this: Any defense of Kardashian on the grounds of her identity is inaccurate and misguided. Aside from the fact that Kardashian, alongside her family, is known for stealing, scamming, misleading and exploiting, she’s far from the only celebrity at risk of being hit with penalties for shilling crypto products.
For example, the SEC charged Floyd Mayweather Jr. and DJ Khaled back in 2018 for promoting investments in initial coin offerings. Both paid tens of thousands of dollars in penalties and were banned from promoting any securities, digital or otherwise, for years.
Before anyone takes crypto advice, of all things, from a celebrity like Matt Damon on the internet, one should ask if Matt Damon takes financial advice from Matt Damon.
Many celebrities pushing crypto products have yet to face off with the SEC, though Gensler’s tweets could signal that for that group, the worst is yet to come. Mark Cuban is facing a class-action lawsuit alleging that his promotion of the now-bankrupt Voyager Digital crypto platform resulted in more than 3.5 million investors losing a collective $5 billion. Matt Damon has avoided any legal action against him for his multimillion-dollar spots promoting Crypto.com because they were explicitly labeled as advertising, but he’s certainly faced a good deal of criticism, especially after the exchange was hacked for $34 million in January.
Suggesting that Kardashian doesn’t deserve criticism of any wrongdoing because she’s a woman is a tired, old argument and one typically only offered in defense of white women, usually by the same people who wouldn’t hesitate to pump crypto on their social media accounts in exchange for a $250,000 check.
In Kardashian’s case, EthereumMax was an unknown token worth almost nothing before she posted about it on Instagram.
It jumped in price by 82% after her post, Quartz reported, before plummeting in value just days later. It’s a pretty egregious example of a celebrity promoting a product with no intrinsic value and — this is legally crucial — no disclosure, which is perhaps why Kardashian paid a fine while celebrities like Cuban, Damon, Reese Witherspoon and Snoop Dogg continue to prop up similarly questionable crypto products with little material consequence.
It remains to be seen how far the SEC and other regulators will go to curtail celebrity promotion of crypto. Regardless, celebrities like Kardashian should be held accountable for peddling questionable information to their followers about a risky asset class — and certainly for failing to disclose they were paid for doing so. That is disingenuous, to say the very least.
These people are not stupid. Celebrities are not dainty creatures in need of support or defense from the 99% when their 1% of business endeavors go astray. They know how to read and write and have a team of people advising them, including investment advisers, tax lawyers and accountants. Kardashian, for her part, is a billionaire with her own private equity firm, an asset class that’s essentially unavailable to the average American (but that’s a topic for another day).
These celebs aren’t posting about crypto because they think it’s a prudent investment and want to altruistically let their fans know about a lucrative opportunity, despite the fact that Kardashian’s Instagram post implied she was innocently “sharing what my friends just told me.” Instead, famous people like Kardashian are just using their massive platforms to promote anything that could help pay the bills for their homes, yachts and private jets.
Celebrities advertise for money, not because they want their fans to become financially independent. They get away with it because fans see them as exemplars of success manifesting a girlboss 2.0 mantra, guiding them to riches just around the corner.
Unfortunately for the vast majority of Americans, data shows the idea that one can invest their way out of poverty or climb multiple rungs of the socioeconomic ladder by using kitschy life hacks and personal finance tips from billionaires is a myth. That Kardashian, perhaps, is the highest-profile name to get dinged by the SEC for promoting crypto so far simply means there should be more enforcement.
Before anyone takes crypto advice, of all things, from a celebrity like Matt Damon on the internet, one should ask if Matt Damon takes financial advice from Matt Damon. Chances are, he likely has a professional financial adviser with a license and years of training to do that for him.
Financial misinformation is one byproduct of a rising trend of people turning to the internet, social media and their favorite influencers for personal finance advice. However, the quest for economic equality starts with economic accountability. The government tends to move slowly regarding regulating new areas in tech and finance, and crypto is no exception.
Rather than an unfairly targeted outlier, count Kardashian as the beginning of a wave of celebrities who very much should, and probably will, start facing the consequences of their actions. That’s justice, kid.