A major Hollywood celebrity is being forced to pay fines from the Securities and Exchange Commission (SEC) for promoting cryptocurrencies on social media.
American businesswoman and media personality Kim Kardashian is being fined nearly $1.3 million, according to an official SEC press release.
The Sec to Kim Kardashian
The SEC says Kardashian caught the regulator’s attention when she promoted an ERC-20 token called EthereumMax (EMAX) without disclosing that she was being paid to do so.
“The Securities and Exchange Commission today announced charges against Kim Kardashian for promoting a crypto asset security offered and sold by EthereumMax on social media without disclosing the payment she received for the promotion. Kardashian agreed to settle the charges, pay $1.26 million in fines, disgorgement and interest and cooperate with the Commission’s ongoing investigation.
The SEC order found that Kardashian failed to disclose that she was paid $250,000 to post on her Instagram account about EMAX tokens, a crypto asset security offered by EthereumMax. Kardashian’s post included a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.”
SEC Chairman Gary Gensler says of the case,
“This case is a reminder that when celebrities or influencers endorse investment opportunities, including crypto-asset securities, this does not mean that these investment products are suitable for all investors. Investors are encouraged to consider the potential risks and opportunities of the investment in light of their own financial goals…
Ms. Kardashian’s 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 endorse securities investments.”
In a new interview with CNBC’s Squawk Box, Gensler points out that Ms. Kardashian is far from the first celebrity the SEC has gone after.
“Many years ago we brought the case with Floyd Mayweather, DJ Khaled, Steven Segal and others over the years. So this is another time we’ve pulled a case.”
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