The terms you are looking for are: shilling and sh*tcoin.
What Exactly Did She Do?
In June 2021, over 200 million people received a promotional message on Instagram touting the generosity of the Etherum Max administrative group. The admin group was “giving back” to the community by dumping tokens into user wallets. The end of the post encourages you to “SWIPE UP to join the E-MAX community.”
Oh and, in case you missed it, there was a #AD buried in other hashtags just prior to the SWIPE UP.
And #AD is universally known to mean advertisement, right?
The supposed underlying utility of this token was admittance to exclusive clubs and restaurants. In reality, you could only play some online games for merch like t-shirts.
The token’s price skyrocketed after Kim Ks Instagram post. Within a few months later, the token’s value fell 97%.
To be clear, this is NOT (repeat NOT) Ethereum, which is the number 2 powerhouse cryptocurrency by market cap. Instead, it was one of the more than 10,000 available “cryptocurrencies” (or tokens). The EMAX admin just had the idea, the money, and the connections necessary to pull their particular sh*tcoin out of obscurity.
The SEC Gets Involved
By the fall of 2022, the SEC determined EMAX was an unregistered security. As such, Kim K needed to explicitly state how much she was paid for the promotion.
It turns out Kim K was paid $250,000 for this one blurb.
In October 2021, the SEC fined her 1.26 million dollars for this infraction. She also agreed to cooperate with an ongoing investigation AND is banned from promoting anything crypto-related for three years.
It is unknown if she made any additional money selling shares of EMAX when it was at its’ peak. Probably.
An additional class action lawsuit (separate from the SEC charges) was filed by other investors in California in January of 2022. This is the lawsuit that has been dismissed as of December 2022, though this is likely not the end of this story.
