Kim Kardashian face $1.26M fine for covertly promoting cryptocurrency on Instagram
Kim Kardashian settled allegations against her about her social media advertising of EthereumMax with the Securities and Exchange Commission (SEC) by paying $1.26 million.
According to a news release issued on Monday, the SEC had filed charges against Ms. Kardashian for failing to disclose the $250,000 payment she received in exchange for posting promotional content about EthereumMax.
“The SEC’s order finds 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 offered by EthereumMax. Kardashian’s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens,” the securities regulator said on Monday.
According to the SEC’s ruling, Kim Kardashian broke the federal securities laws’ anti-touting clause. Her $1.26 million payment consists of a $1 million fine, $260,000 in disgorgement (which includes the advertising charge), prejudgment interest, and $260,000 in disgorgement.
Floyd Mayweather Jr., a professional boxer, had also advertised EthereumMax, a company unrelated to the digital currency Ethereum. Investors in EthereumMax filed a lawsuit against Ms. Kardashian and Mr. Mayweather in January.
“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,” SEC Chairman Gary Gensler said in a tweet.
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
