Continuous Crackdown on Crypto by US SEC is a Bullish Factor for Investors – Report

Investors in the digital currency ecosystem have varying reasons to inject their capital into the emerging industry and the current crackdown from the United States Securities and Exchange Commission (SEC) is one of the main pushes for investors per a recent Bloomberg survey.


The results from the latest MLIV Pulse survey showed that of the 564 respondents surveyed, as many as 60% affirmed that the crackdowns present a positive push for investing in the industry. The SEC has not tapered down its enforcement actions in recent times as it has launched lawsuits against crypto firms, employees, and even celebrities that have contravened the law.

In one of its highest-profile actions, the SEC charged reality TV superstar, Kim Kardashian for non-disclosure of her earnings for the promotion of EthereumMax tokens (EMAX) considered a security by the regulator. When the indictment was brought against her, Kim Kardashian agreed to pay all of the fines worth $1.26 million without admitting or denying any wrongdoing.

According to the survey, around 65% of retail investors say they are more likely to invest in the industry with more enforcement action, a number that compares to 56% for professional investors. 

“I’m in the ‘yes’ camp. As a professional investor, you need a regulated investment opportunity and it opens the doors for more professional investors to get involved in crypto, if it’s more regulated,” said Chris Gaffney, president of world markets at TIAA Bank. “The more they can get crypto out of the Wild West and into traditional investing, the better off it’s going to be.”

The rate of fraud and cybercrime in the industry is growing at a frantic pace and the fact that developers in the crypto industry have a watchdog to make them accountable will help in driving additional due diligence that can guarantee peace of mind for investors across the board.

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Kim Kardashian Charged $1.2M by the SEC For EthereumMax Promotion

American TV reality superstar, Kim Kardashian has been charged by the United States Securities Commission (SEC) for the promotion of EMAX Token, the native coin of the EthereumMax protocol. 


As contained in a press release issued by the commission, Kim did not disclose that she was paid the sum of $250,000 for the promotion which she posted on her Instagram handle. As described by the SEC, the posted promotion contained a link that lead visitors to a landing page where instructions on how to buy the token can be obtained.


Kim has neither admitted to nor denied she breached the anti-touting provision of the federal securities laws. However, she has agreed to pay the total sum of $1.26 million, including $260,000 as disgorgement to stand in for the payment she received for the promotions and pre-judgment interest, and a $1 million penalty.


“This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn’t mean that those investment products are right for all investors,” said SEC Chair Gary Gensler. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”


The regulator said it is mandatory that celebrities disclose whatever remuneration they were given and that the members of the public deserve to know. Per the sanctions levied on the celebrity, she has also agreed not to promote any crypto asset for the next three years. In addition, she has agreed to co-operate with the investigators as the case is still very much open.

The SEC is known to crack down on celebrities for promoting fraudulent crypto tokens. Back in June 2020, professional boxing legend, Floyd Mayweather was also indicted for the promotion of Centra Tech’s Initial Coin Offering (ICO) back in 2017.

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Instagram Influencers Sued by Investors for Falsely Promoting Crypto Tokens

Instagram influencers Kim Kardashian and American boxer Floyd Mayweather have been sued by investors, accusing celebrities of falsely promoting crypto tokens to mislead investors.

The lawsuit, filed by a New York resident who bought EMAX tokens and lost money, is proposed to be filed as a class action in federal court in Los Angeles on Jan. 7, according to the report from Reuters on Jan. 11.

In June last year, Kim Kardashian West posted an Ethereum-related network project-related story on her Instagram story with 228 million followers.

Kim Kardashian West shared a cryptocurrency called “Ethereum Max token” in the story she posted. The post was not financial advice, but Kim Kardashian West labelled it with hashtag #AD beneath, indicating that this post was charged.

Mayweather promoted EthereumMax on his boxer shorts during his June fight with YouTube star Logan Paul.

The lawsuit reads:

“The company’s executives, collaborating with several celebrity promoters … made false or misleading statements about EthereumMax through social media advertisements and other promotional activities.”

The company’s EthereumMax was also named in the lawsuit. EthereumMax said in a statement:

“The deceptive narrative associated with the recent allegations is riddled with misinformation about the EthereumMax project.”

Last Sept. 7, British financial watchdogs were wary of investors’ cryptocurrency investment risks introduced by well-known influencers like Kim Kardashian West.

Chairman of the Financial Conduct Authority Randell stated that it is not that this particular token is a scam, saying that:

“But social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation. Some influencers promote coins that turn out simply not to exist at all.”

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45% of Crypto Owners Say They Would Buy an Altcoin Based on This One Factor: Study

Nearly half of cryptocurrency owners claim that they would race to purchase an altcoin based on one key development.

A survey from data intelligence firm Morning Consult polled 2,200 US adults earlier this month to study the impact of celebrities on crypto investor decisions.



Among crypto owners who participated in the poll, 45% say they would follow a celebrity or influencer’s crypto advice, but 81% still opt for investing tips from their financial advisor. 

The result of the study comes after influencer Kim Kardashian promoted the cryptocurrency EthereumMax (EMAX) on her Instagram account. 

76% of the crypto holders claim that they would invest in a digital asset if it were endorsed by a family or friend and 53% say they would take advice from a reporter of a business publication.

20% of the respondents say they are aware of Kardashian’s crypto post, but the percentage among crypto owners is higher at 31%. 

Of those who saw Kardashian’s Instagram post, 19% invested in EthereumMax, but Morning Consult financial services analyst Charlotte Principato says that this does not translate to celebrity endorsements being effective in the crypto space. 

“That doesn’t mean that celebrity endorsements are good for crypto in general – at least not from Kardashian. After being told in the survey that the reality star endorsed Ethereum Max, trust in cryptocurrencies in general dropped roughly five points.

While crypto owners are more likely than the typical investor to turn to celebrities for crypto advice, those that own crypto put more stock into what a traditional financial advisor would recommend.”

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Almost half of crypto owners turn to celebs like Kim Kardashian for advice: Survey

A new survey has revealed bleak insights into the apparent willingness of retail investors to follow digital asset advice from the social media accounts of celebrities and influencers.

According to a Morning Consultant survey of 2,200 U.S. adults, 45% of crypto-holding respondents indicated they would be likely to seek exposure to a digital asset if it is endorsed by a celebrity, compared to just 20% of participants overall.

There were some more promising results, with three-quarters of crypto investors indicating they were likely to invest based on a family member or friend’s recommendation while 81% would invest in response to advice from a financial advisor.

Almost 20% of all respondents and nearly one third of crypto owners said they were aware of a post published to Kim Kardashian’s Instagram account spruiking the ERC-20 token Ethereum Max (EMAX) in early June. An astonishing 19% of respondents who saw the Instagram ad admitted to having invested in Ethereum Max afterward  — however they comprising just 3.8% of the overall sample.

The post and project have been embroiled in controversy ever since. The price of EMAX saw meteoric growth after being announced on May 26 as “the exclusive cryptocurrency accepted for online ticket purchasing” for the cash-grab boxing match between undefeated boxer Floyd Mayweather and YouTuber Logan Paul on June 6.

While EMAX had traded for as little as $0.00000000073 (nine zeros) prior to the announcement, news of its affiliation with the boxing event saw prices skyrocket above $0.00000085 (six zeros) by June 1 — a gain exceeding 116,000% in just one week.

After Ethereum Max then shed more than 99% of its value in under two weeks, Kardashian published the ad on June 13 to her 250 million followers that highlighted that 50% of EMAX tokens held by the project’s admin wallet had been burned.

While the token was trading as low as $0.0000000076 (seven zeros) before the Instragram post went live according to CoinMarketCap, EMAX rallied to $0.000000235 (six zeros) by June 14 — a 3,000% gain in less than two days.

EMAX has consistently trended downwards since mid-June, with the token last trading hands for $0.000000021(seven zeros) — a 91% drawdown from the local highs that followed Kim Kardashian’s Instagram endorsement.

The incident did not go unnoticed by financial regulators, with the head of the United Kingdom’s Financial Conduct Authority, Charles Randell, describing the Kardashian’s Instagram post as possibly the single “financial promotion with the biggest audience reach in history.” He added:

“I can’t say whether this particular token [Ethereum Max] is a scam. But social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation. Some influencers promote coins that turn out simply not to exist at all.”

Kim Kardashian is not the first celebrity to draw the ire of financial watchdogs for promoting crypto assets to their social media followers, and unlikely to be the last too.

Related: Australian Watchdog Issues Warning on Fake Celebrity-Endorsed Crypto Ads

In 2018, the U.S. Securities and Exchange Commission charged Floyd Mayweather and musician DJ Khaled unlawfully promoting the Centra initial coin offering (ICO) the previous year.

While the SEC has warned celebrities that they must disclose paid promotions for ICOs on social media, many celebrities are now spruiking their own nonfungible tokens amid the NFT boom.