Kardashian concealed a $250,000 payment she had received in exchange for promoting EthereumMax and its token-burning feature in a message to her 250 million Instagram followers
Kim Kardashian has been charged by the Securities and Exchange Commission for promoting a crypto asset security offered and sold by EthereumMax on social media without reporting the compensation she got for the promotion. Kardashian agreed to settle the case in exchange for dropping the accusations, paying $1.26 million in fines and cooperating with the Commission’s ongoing investigation.
She will be prohibited from promoting any cryptocurrency on her social media accounts for three years as part of the settlement.
Kardashian promoted EthereumMax and its token-burning feature in a message to her 250 million Instagram followers in June 2021. Even though she identified the post as an “ad,” she omitted to mention that she had received payment. According to the release, Kardashian concealed a $250,000 payment she had received in exchange for posting a link to the project’s website along with an advertisement for EMAX tokens on her Instagram profile.
SEC chairman Gary Gensler stated “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.
“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,” he added.
An investor group that bought EthereumMax before it crashed had sued Kim earlier this year. The investors claimed that the three conspired with the token’s founders to seduce investors and then dump the tokens on them. They also sued boxer Floyd Mayweather and retired NBA player Paul Pierce.
Kardashian agreed to settle the accusations but did not accept or reject the SEC’s findings. This was divided between a $1 million fine and a disgorgement of $260,000. In addition, Kardashian has pledged to refrain from endorsing any cryptocurrency assets until 2025. After the SEC settlement, her attorney expressed satisfaction at having “settled this problem” and noted that she had collaborated with regulators from the start.
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