Kim K. has run afoul of the law because of her crypto-related shenanigans. On Monday, the Securities and Exchange Commission stated that the reality TV actress and influencer have settled accusations that she failed to disclose payment for advocating a crypto asset on her Instagram page.
The Securities and Exchange Commission (SEC) declared on Monday that any investor who read about the EthereumMax project’s plans to sign deals that “push value” into EMAX or heard its advocates anticipating price surges would have a “reasonable expectation” of generating money. To rephrase, EMAX is a form of investment. Despite the fact that the SEC is not tasked with overseeing cryptocurrencies, its leadership considers the vast majority of these tokens to be securities that fall within its purview. The stakes for a crypto project and its backers skyrocket if the SEC labels them as such, however, the regulator has only taken action against a small fraction of the industry so far.
EMAX pumps by Kim Kardashian
Attorney Nelson Rosario, who specializes in cryptocurrency law, stated, “The SEC can have their pick of the litter in terms of tokens that they deem securities, but only one is a Kim Kardashian insider or confidant. If you want to, you can use her as an example. It’s quite cost-effective; you can tell a lot of people about it.
On Monday, the SEC penalized Kardashian $250,000 for promoting EMAX on Instagram to her 225 million followers without stating she was paid $250,000. One British financial regulator at the time said it was one of the largest financial promotions in history. However, the transaction involved security, making it illegal.
The creators of EMAX have never registered with the Securities and Exchange Commission (SEC), and they have not made any public statements suggesting the token is a security. CoinDesk sought feedback from EthereumMax but did not receive a response.
More About EthereumMax Token
It is the stated goal of EthereumMax’s white paper to build a “robust and scalable ecosystem that fully utilizes the capability of” decentralized finance (DeFi). According to the project’s own timeline, it all started when COVID-19 was locked down and a group of crypto believers with a “deep focus” set out to create a token that might soar.
The end outcome is EMAX, a token that promises social benefits. “Special access” to “the hottest restaurants and clubs,” the white paper said, is available exclusively to EMAX owners. Culture tokens are EthereumMax’s official currency. The project’s developers advocate for EthereumMax-connected exchanges, NFT markets, and other nodes that provide holders with benefits. Those are not out yet.
With 1 billion tokens, EMAX holders can play a variety of gambling games on the EthereumMax platform. The prizes are not crypto coins but rather additional gaming credits. Winners may receive trillions of EMAX tokens; runners-up receive T-shirts.
Meanwhile, EthereumMax is using “burn-baby-burn” tokenomics by reducing the number of circulating EMAX tokens from an initial supply of 2 quadrillions. In her commercial, Kim Kardashian praised the EMAX founders for “giving back to the entire EMAX community” by destroying 400 trillion tokens.
EthereumMax proponents believe that the quick and inexpensive scaling solution Arbitrum is a better fit for the ecosystem than Ethereum, hence in February, the token was moved from Ethereum to Arbitrum. Nansen reports that 31% of all tokens in circulation have made the switch to Arbitrum. The tokens’ owners can’t do anything with them yet.
The People Who Make EMAX Work
Almost every cryptocurrency project brags about its “community” of backers who think its token or NFT will revolutionize society. And EthereumMax, whose website boasts of its ability to “alter history,” is no exception. To maintain interest among its most accessible audience (about 30,000 Twitter followers), the company regularly distributes educational and partnership content.
While EthereumMax’s Twitter is for public announcements, the project’s Discord server is where its most devoted supporters congregate. There, the community of around 2,300 EthereumMax investors can discuss the company’s crypto alliances, its excursions into gaming, its price movement, or anything else.
I mean, there really isn’t much there. A user questioned the “credibility” of EMAX on February 27 after holding onto the token “through ups and downs,” despite having purchased it before the Kardashian ad.
When bad news is in the air, like plummeting prices, the manager says it’s not uncommon for members of the crypto Discord to deploy “hyperbolic” allegations. Suppressing people for no other reason than that they are voicing dissatisfaction is not acceptable, the boss insisted.
In spite of the SEC’s action against Kardashian, the EthereumMax community remained optimistic. As one user pointed out on Discord, the SEC merely claimed that EMAX was security and not a scam. (Kardashian is helping the SEC with its “ongoing investigation” of EMAX, the agency has said.)
The general sentiment on EMAX’s Telegram channel seemed to be that this positive press coverage will benefit the coin. Many articles have labeled EMAX a “scam token,” although the coin is actually waiting to reveal its features until the market conditions are more favorable, as user Deebo put it: “It was a letdown.”
Despite this, EMAX’s stock price increased by almost 40% after the SEC’s decision. The day’s volume was the largest since March by far, at almost $63,000 worth of tokens changing hands.
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