The celebrity who lost $27M promoting a startup

In October 2022, Kim Kardashian agreed to pay $1.26 million to settle SEC charges after posting about EthereumMax tokens to her 330 million Instagram followers without disclosing she'd been paid $250,000 for the endorsement. The post included a link to the EthereumMax website and appeared to many followers as a genuine investment tip from someone they trusted.

The timing couldn't have been worse for crypto enthusiasts who followed her advice. EthereumMax tokens peaked shortly after her June 2021 post, then collapsed by more than 97% over the following year. A class-action lawsuit alleged that Kardashian and other celebrity promoters, including Floyd Mayweather and Paul Pierce, had participated in a pump-and-dump scheme, though those civil claims were later dismissed.

The case represented a watershed moment for influencer marketing and crypto regulation. The SEC had been warning about celebrity crypto endorsements for years, but enforcement had been scattered. Kardashian's settlement—which included $1 million in disgorgement, a $260,000 penalty, and a ban from promoting crypto securities for three years—sent a clear message that social media posts count as securities promotion and fall under the same disclosure rules as traditional advertising.

The aftermath reshaped how celebrities approach paid promotions in the crypto space. Major talent agencies began requiring legal review of crypto deals, and many celebrities quietly scrubbed old crypto posts from their feeds. For the SEC, it was a test case that proved social media influencers with massive followings couldn't claim ignorance of securities laws just because the pitch happened on Instagram instead of television.