On Monday (October 3), gold bug Peter Schiff said that instead of going after Kim Kardashian, the U.S Securities and Exchange Commission (\u201cSEC\u201d) should have charged \u201cthe real pumpers\u201d like MicroStrategy Co-Founder and Executive Chairman Michael Saylor.<\/p>\n
Bitcoin perma-bear Peter Schiff, who is one of Bitcoin\u2019s harshest critics,\u00a0is the CEO of\u00a0Euro Pacific Capital, a full-service, registered broker\/dealer specializing in foreign markets and securities. He is also Founder and Chairman of\u00a0SchiffGold, a full-service, discount precious metals dealer.<\/p>\n
Schiff\u2019s comments were made following yesterday\u2019s announcement by the SEC that it had brought charges against American media personality and entrepreneur Kim Kardashian for alleged promotion of cryptoasset $EMAX.<\/p>\n
The SEC\u2019s\u00a0press release\u00a0stated that these charges were \u201cfor touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion\u201d and that she had \u201cagreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate with the Commission\u2019s ongoing investigation.\u201d<\/p>\n
The press release went on to mention that its order \u201cfinds that Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens, the crypto asset security being offered by EthereumMax\u201d and that \u201cKardashian\u2019s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.\u201d<\/p>\n
And Gurbir S. Grewal, Director of the SEC\u2019s Division of Enforcement, stated:<\/p>\n
\u201cThe federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion. Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.<\/em>\u201c<\/p>\n The SEC also said that \u201cwithout admitting or denying the SEC\u2019s findings, Kardashian agreed to pay the aforementioned $1.26 million, including approximately $260,000 in disgorgement, which represents her promotional payment, plus prejudgment interest, and a $1,000,000 penalty.\u201d Apparently, she also \u201cagreed to not promote any crypto asset securities for three years.\u201d<\/p>\n Before looking more closely at what Schiff said yesterday, it is worth saying a few words about Michael Saylor and his Nasdaq-listed software company MicroStrategy Inc.<\/p>\n On 11 August 2020, MicroStrategy announced via a\u00a0press release\u00a0that it had \u201cpurchased 21,454 bitcoins at an aggregate purchase price of $250 million\u201d to use as a \u201cprimary treasury reserve asset.\u201d<\/p>\n Saylor said at the time:<\/p>\n \u201cOur decision to invest in Bitcoin at this time was driven in part by a confluence of macro factors affecting the economic and business landscape that we believe is creating long-term risks for our corporate treasury program \u2015 risks that should be addressed proactively.<\/em>\u201c<\/p>\n Since then MicroStrategy has continued to accumulate Bitcoin and its former CEO has become one of Bitcoin\u2019s most vocal advocates.\u00a0MicroStrategy\u2019s latest $BTC purchase, which Saylor tweeted about on 20 September 2022, means that the firm is now HODLing around 130,000 bitcoins, which were \u201cacquired for ~$3.98 billion at an average price of ~$30,639 per bitcoin.\u201d<\/p>\n This move by the SEC to charge Kardashian led Schiff to send out a tweet in which he said that the SEC should be people like Saylor who \u201chad much more to gain pumping crypto than Kim.\u201d Saylor then replied to Schiff to point out that he has not violated any U.S. securities laws since Bitcoin is recognized by the SEC as a commodity (like silver and gold) and not a security.<\/p>\n As you can see from the tweet below, which was sent out by Saylor on 27 June 2077, SEC Chair Gary Gensler, just like his predecessor Jay Clayton, has confirmed on more than once occasion that the SEC views Bitcoin as a commodity.<\/p>\n