If you bought EMAX crypto tokens when Kim Kardashian promoted them on Instagram, you would have lost over 95% of your money by now
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Ethereum max has lost 95% of its value since June 2021, when Kim Kardashian promoted it.
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Investing in tokens like EMAX is risky because the value can plummet, experts have told Insider.
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She will pay a fine for not disclosing how much she was paid to promote EMAX, the SEC said.
If you had been influenced by Kim Kardashian to buy ethereum max tokens last year, your holding would have lost 95% of its value by now.
Kardashian promoted the token on her Instagram story in June 2021 – a post that has now landed her in hot water with the Securities and Exchange Commission. The SEC announced Monday that Kardashian would be fined $1.26 million and had agreed not to promote any cryptocurrencies for three years to settle charges that she failed to disclose how much she had been paid to promote ethereum max.
In the 16 months since her post, the token’s value has dropped 95.3%. That means if you invested $100 after Kardashian promoted the token, your investment would be worth about $5 today.
EMAX’s value relies on hype from promoters like Kardashian
Ethereum max, aka EMAX, has been mired in controversy since its launch in May 2021. The token is not affiliated with the well-known ethereum cryptocurrency – instead, EMAX is an altcoin that uses ethereum’s blockchain ledger to record sales and transactions.
EMAX’s value is based on hype: As investors and promoters like Kardashian spread the word, more people invest and the price goes up. (Kardashian was paid $250,000 for her position, the SEC said — presumably in U.S. dollars, though the regulator did not disclose that information. As part of the settlement, Kardashian neither admitted nor denied the SEC’s allegations.)
Altcoins like EMAX lack the stability of older types of cryptocurrencies, such as bitcoin and ether. And EMAX has never reached the meteoric heights that bitcoin has: At its peak in November, bitcoin was worth around $69,000 per coin, while EMAX peaked at the equivalent of $0.000000051 shortly after launch, according to CoinMarketCap.
Tokens like EMAX make for riskier investments because when investors stop buying or start selling, the token’s value can quickly plummet, crypto experts told Insider last year.
EMAX did just that. By January, the token’s value had plunged 98%, prompting investors to sue Kardashian and other celebrities who had promoted the token, including boxer Floyd Mayweather and former NBA star Paul Pierce. Both Kardashian and Mayweather have filed motions to dismiss the case, with their attorneys arguing that there is insufficient evidence that their endorsements led to the plaintiffs’ purchase of EMAX.
While it’s unclear how many people invested based on the celebrity endorsements, Morning Consult data found that Kardashian’s ad reached about one in five American adults and about 30% of crypto owners.
Read the original article on Business Insider
