Kim Kardashian recently agreed to pay $1.26 million as a fine to the Securities and Exchange Commission (SEC). She paid the fine to settle charges for allegedly promoting a cryptocurrency token on social media without disclosing how much she earned from the promotion. For the inexperienced, Kim Kardashian posted a story on Instagram in June 2021 and invited her 328 million followers to invest in what is called EthereumMax.
This is what Kim Kardashian wrote on her Instagram story while promoting the cryptocurrency token: “This is not financial advice. But sharing what my friends just told me about the Ethereum Max token!” The beauty mogul also added the word ‘advertisement’ among her hashtags, implying that her purpose was to promote it.
According to the latest reports, the SEC charged Kim Kardashian with illegally promoting crypto security. The SEC further said that the beauty mogul violated her rules when she chose to promote the crypto asset offered by EthereumMax without disclosing that she was paid to promote it.
Gary Gensler, Chairman of the US Securities and Exchange Commission, took to social media and revealed, “Today @SECGov, we are charging Kim Kardashian with illegally promoting crypto security. This case is a reminder that when celebrities/influencers endorse investment opportunities, including crypto asset securities, it does not mean that those investment products are suitable for all investors.”
This day @SECGovwe charged Kim Kardashian with illegally promoting crypto security.
This case is a reminder that when celebrities/influencers endorse investment opportunities, including crypto asset securities, it does not mean that those investment products are suitable for all investors.
—Gary Gensler (@GaryGensler) October 3, 2022
He also said: “Mrs. The Kardashian case also serves as a reminder to celebrities and others that they are required by law to disclose to the public when and how much they are paid to promote stock investing.”
As mentioned above, Kim Kardashian has agreed to pay the charges and settle everything by cooperating with the commission’s ongoing investigation. The SEC order also states that Kim Kardashian failed to disclose that she was paid $250,000 by the cryptocurrency organization to publish the post on her Instagram account about the EMAX tokens provided by EthereumMax.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, also said: “Federal securities laws are clear that any celebrity or other person promoting a crypto asset security must disclose the nature, source and amount of compensation she received in exchange for the promotion, adding: “Investors have a right to know whether a security’s advertising is unbiased, and Ms. Kardashian did not disclose this information.”
Speaking of Kim Kardashian, she is currently seen in the second season of The Kardashians which is receiving a huge response from the audience. She also attended Paris Fashion Week with the rest of her siblings and children, where she also met her ex-husband Kanye West.