Endorsing something as unregulated as cryptocurrencies can land celebrities in trouble. This is something Kim Kardashian is learning the hard way. The reality star is fined by the Securities And Exchange Commission for misleading activity on social media. She promoted a crypto asset without disclosing to the public anything about the payment she received for the post.
Kim Kardashian Charged With A $1.26 Million Fine
On Monday, the SEC revealed that the SKNN owner is to pay a $1.26 Million fine for failing to comply with the regulation. As per sources, Kim got a $250,000 compensation to publish the post on her Instagram account. This cryptocurrency is EMAX tokens which is a crypto asset security by EthereumMax.
The reality star has agreed to cooperate with the ongoing investigation. Finally, she is barred from promoting anything related to crypto on her social platforms for three years. Kim’s post featured a link to EthereumMax’s official website that carried instructions for potential buyers to purchase the EMAX tokens.
SEC’s chairperson Gary Gensler explained, “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. We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
Today @SECGov, we charged Kim Kardashian for unlawfully touting a crypto security.
This case is a reminder that, when celebrities / influencers endorse investment opps, including crypto asset securities, it doesn’t mean those investment products are right for all investors.
— Gary Gensler (@GaryGensler) October 3, 2022
“Ms. Kardashian’s case also serves as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities,” Gensler further added.
Kim Kardashian Also Has To Return The Endorsement Fees
As per TVLine, Kim Kardashian has neither admitted to nor denied the SEC’s findings but has agreed to pay the $1.26 Million fine. Moreover, the reality star also has to return the $260,000 endorsement fees received by EthereumMax.
Kardashian’s lawyer did release a statement regarding the matter and said,
“Ms. Kardashian is happy to resolve this matter with the SEC. She fully cooperated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter. She wanted to get this matter behind her to avoid a protracted dispute. The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits.”
Kim Allegedly Involved In A Pump And Dump Scheme
In January, Kim Kardashian, Floyd Mayweather Jr, Paul Pierce, and EthereumMax’s creators were sued by investors. As per the court documents, the plaintiff alleged that they had collaborated on a misleading promote and sell crypto activity. This was a pump-and-dump scheme brought together to inflate the price before selling to investors.
At the time, EthereumMax disputed all these allegations. Even though the name EthereumMax is similar to the Ethereum Cryptocurrency, the two aren’t related whatsoever.
What do you think of Kim Kardashian’s latest misleading promotions? Share your thoughts in the comments!
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