Kim Kardashian to Pay $1.26M to Settle SEC Charges Over Crypto Promotion
Kim Kardashian agreed to pay $1.26 million to resolve claims that she broke SEC regulations by promoting a cryptocurrency token on social media without disclosing to her fans that she was being paid to do so.
According to the regulator, the reality TV actress received $250,000 for her Instagram posts concerning EthereumMax (EMAX) coins. Along with prejudgment interest and a $1 million punishment, the fine also includes $260,000 in repayment of ill-gotten gains. She also consented to stop promoting cryptocurrency for three years.
SEC Chair Gary Gensler tweeted, “This case is a reminder that just because celebrities or influencers support investing options, including crypto asset securities, doesn’t indicate that those investment products are suited for all investors.
KEY TAKEAWAYS
- Kim Kardashian has agreed to pay $1.26 million to resolve SEC allegations that she promoted cryptocurrency on social media without indicating she was being paid to do so.
- According to the SEC, she received $250,000 for her Instagram posts regarding cryptocurrencies.
- Kardashian consented to refrain from promoting cryptocurrencies for three years.
What Did Kim Kardashian Say?
Kardashian is one of the social media stars with the highest followers, with 331 million on Instagram and roughly 74 million on Twitter. The SEC action began in June 2021, when she used the hashtag #ad to tweet about EMAX tokens and posed the question, “ARE YOU INTO CRYPTO?? SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN IS NOT FINANCIAL ADVICE.
According to the SEC, the now-deleted post had a link to the EthereumMax website, which offered guidance on how potential investors may buy the tokens.
Investors Sue Celebrities
Superstar boxer Floyd Mayweather Jr. and ex-NBA player Paul Pierce had already supported the cryptocurrency asset, which is unrelated to Ethereum. Investors accused them of fraudulently inflating its worth in a class action complaint that was launched earlier this year in the Central District of California. 5
It was introduced in May 2021 as EthereumMax. According to UK officials, her tweet increased it by more than 1,370% in just two weeks.
The Bottom Line
Due to the assets’ technical classification as commodities rather than securities, the SEC’s announcement reignited a debate over whether it should get involved in the cryptocurrency market. Some Twitter users expressed concern that the regulator is going after smaller companies rather than the industry’s biggest players. It also implies that the SEC may increase its monitoring of celebrities who have advocated cryptocurrency.
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Kim Kardashian to Pay $1.26M to Settle SEC Charges Over Crypto Promotion
Kim Kardashian to Pay $1.26M to Settle SEC Charges Over Crypto Promotion
Kim Kardashian to Pay $1.26M to Settle SEC Charges Over Crypto Promotion
Kim Kardashian to Pay $1.26M to Settle SEC Charges Over Crypto Promotion
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