- US Securities and Exchange Commission (SEC) announced charges against Kim Kardashian for touting EthereumMax on social media.
- Kardashian agreed to settle the charges and pay $1.26 million in penalties, disgorgement and interest in the ongoing investigation.
- Kim received $250,000 for promoting EthereumMax on Instagram , touting EMAX tokens and sharing a link to the website.
US regulator the Securities and Exchange Commission (SEC) brought charges against Kim Kardashian for touting EthereumMax through her Instagram account. Kardashian failed to disclose that she received $250,000 for promoting EMAX tokens and the regulator has slammed the celebrity for sharing instructions on how to purchase the asset through her Instagram account.
Also read: How eight state regulators orchestrated crypto lender Nexo’s takedown and why it matters
SEC announces charges against Kim Kardashian for promoting EthereumMax
Kim Kardashian, a reality TV star and influencer, has paid $1.26 million to the US Securities and Exchange Commission (SEC) to settle charges brought against her for promotion of cryptocurrency EthereumMax.
In the summer of 2021, three celebrities Kim Kardashian, Floyd Mayweather and former NBA star Paul Pierce were hit by a lawsuit from an aggrieved EMAX investor. The lawsuit alleged that the three celebrities colluded with EMAX co-founders Steve Gentile and Giovanni Perone to pump the price of EMAX before subsequently orchestrating a dump. This resulted in massive losses for EMAX holders. This lawsuit was the beginning of legal trouble for the reality TV star.
The SEC filed charges against the influencer for failing to disclose the amount she received for posting the promotional content on her Instagram account. In addition to payment of settlement charges, Kardashian has agreed to refrain from promoting cryptocurrencies for three years. By bringing charges against the influencer, the SEC has set an example for all influencers to disclose details of payment received in exchange for promotion of crypto asset securities.
Kardashian posted a link to the EthereumMax website on her Instagram handle with 331 million followers, and this contained step by step instructions for investors to purchase EMAX tokens. The reality TV star failed to disclose that she received $250,000 for promoting the tokens.
Gary Gensler, SEC chair was quoted as saying:
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.
Gensler explained that Kim Kardashian’s case is a reminder for celebrities and influencers that the law requires them to disclose to the public when and how much they are paid to promote an investment in a security.
Today @SECGov, we charged Kim Kardashian for unlawfully touting a crypto security.
— Gary Gensler (@GaryGensler) October 3, 2022
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.
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