🪙 Kim Kardashian paid $1.26M to settle the SEC's EthereumMax case

The 2022 order required no admission or denial. That December, a judge dismissed the fraud claims in a separate class action over the token. 📌

By , creators desk · Desk editor Gustavs Ērkšķis-Kreicbergs · · 2 min read

Kim KardashianSETTLEDPhoto: Eva Rinaldi · CC BY-SA 2.0

Photo: Eva Rinaldi, CC BY-SA 2.0, via Wikimedia Commons. Desaturated and cropped by MrScandal.

By the numbers

  • 3 yrsfrom first to latest entry on record2019 to Dec 2022, 4 dated entries in the file
  • 3receipts behind this story2 news reports, 1 regulator record, all from 2022

Counted by MrScandal from the receipts, the Files and our rankings.

The record: in October 2022, the Securities and Exchange Commission announced that Kim Kardashian had agreed to pay $1.26 million and sit out crypto promotion for three years, after she failed to disclose a $250,000 payment behind her Instagram post for the token EthereumMax, per the SEC's own order.

What we know

  • A January 2022 class-action complaint accused EthereumMax of running a pump-and-dump scheme and named Kardashian, Floyd Mayweather Jr. and Paul Pierce as defendants for promoting the token on social media.
  • The SEC announced in October 2022 that Kardashian agreed to pay $1.26 million for failing to disclose a $250,000 payment behind her Instagram post promoting EthereumMax.
  • The same SEC order barred her from promoting any crypto asset for three years and required her cooperation with the agency's ongoing investigation, without her admitting or denying the findings.
  • In December 2022, U.S. District Judge Michael Fitzgerald dismissed the class action, ruling the fraud claims didn't meet the heightened pleading standard federal law requires.

The ad, the fee, the fine

Kardashian's Instagram post touting EthereumMax ran in June 2021; it carried a '#ad' tag but did not disclose the $250,000 payment, CNBC reported. The SEC's order ties the $1.26 million to that promotion: about $260,000 in disgorgement representing her payment, prejudgment interest, and a $1 million penalty. By January 2022, the token had lost 97% of its value, CNBC reported.

The class action

The regulator's order wasn't the only paperwork with her name on it that year. A class-action complaint filed in January 2022 accused EthereumMax of running a pump-and-dump scheme and named Kardashian, boxer Floyd Mayweather Jr. and former Boston Celtics star Paul Pierce as defendants for promoting the token to their followers, The Wall Street Journal reported.

In December 2022, U.S. District Judge Michael Fitzgerald dismissed the class action against the promoters, ruling the plaintiffs' allegations fell short of the heightened pleading standard federal law sets for fraud claims. He gave the plaintiffs leave to refile after amending some of their claims, CNBC reported. Michael Rhodes, a lawyer for Kardashian, told CNBC: 'We're pleased with the court's well-reasoned decision on the case.'

No admission, no denial

The SEC order itself settles the regulatory side without Kardashian admitting or denying the agency's findings - standard language for a case closed by payment rather than by trial. The two matters, regulatory fine and civil suit, ran on separate tracks.

Her post, CNBC noted, opened 'Are you guys into crypto???' and added the line 'This is not financial advice.' The disclosure the SEC actually wanted was the $250,000 - and that was the part left out.

Quick quiz · 3 questions

  1. On the record or still rumour?SEC order (October 2022): Kardashian paid $1.26 million and agreed to a three-year ban on promoting crypto assets, without admitting or denying wrongdoing.
  2. On the record or still rumour?Any on-record statement from EthereumMax or its founders responding to the cases.
  3. Which year?Kardashian said on Keeping Up with the Kardashians the Kimono name was a mistake, per Page Six

More games on the record: Price Tag · Timeline

Earlier on file: Kardashian's Skims offers refunds on $148 advent calendar

The Kim Kardashian file

Last entry Dec 2022
  1. Ruled

    2022-12 [adjudicated] Judge Michael Fitzgerald dismisses the EthereumMax class action for insufficient fraud pleading, with leave to refile. This story

  2. Ruled

    2022-10 [adjudicated] SEC order: agreed to pay $1.26 million (penalty, disgorgement and interest) over an undisclosed $250,000 EthereumMax promotion payment, wi This story

  3. Filed

    2022-01 [filed] Named as a defendant in the EthereumMax class action for promoting the token, per court filing. This story

  4. Admitted

    Kardashian said on Keeping Up with the Kardashians the Kimono name was a mistake, per Page Six. Kardashian's Skims offers refunds on $148 advent calendar

On file: The Kim Kardashian file · The EthereumMax file

The Ledger

On the record

  • SEC order (October 2022): Kardashian paid $1.26 million and agreed to a three-year ban on promoting crypto assets, without admitting or denying wrongdoing.
  • A federal judge dismissed the fraud claims in the related EthereumMax class action in December 2022, finding them insufficiently pled and granting leave to refile.

Still rumour

  • Whether any EthereumMax buyers who followed the promotion recovered money.
  • Any on-record statement from EthereumMax or its founders responding to the cases.

That's the record. The rest is rumour. - MrViral

Next on the docket

More Influencer

More from MrViral, the MrScandal creators desk.