Kim Kardashian agreed to pay the Securities and Exchange Commission more than $1 million in a settlement for endorsing a cryptocurrency asset without disclosing to her fans that she was paid $250,000 to do so.
According to an SEC filing, the dispute began when Kardashian promoted EMAX coins offered by Ethereum Max on her Instagram account.
The Instagram post asks, “Are you guys into crypto? This is not financial advice but just sharing what my friends told me about the Ethereum Max token.”
According to the SEC settlement order, the post was published on June 13, 2021.
According to the order,“EthereumMax, through an intermediary, paid Kardashian $250,000 for this promotion. Kardashian did not disclose that she had been paid by EthereumMax or the amount of compensation she received from EthereumMax for making this post. “
According to the court ruling, the failure to disclose “violated Section 17(b) of the Securities Act, which makes it unlawful for any person to promote a security without fully disclosing the receipt and amount of such consideration from an issuer.”
According to the ruling, Kardashian must pay the SEC $1.26 million, which includes the $250,000 she was awarded, nearly $10,000 in interest, and a $1 million fine.
In accordance with the conditions of the judgment, Kardashian is also prohibited for the following three years from marketing any kind of crypto security device.
In 2017, the SEC mandated that celebrities who promote any sort of virtual currency or security must declare the amount of compensation they received for doing so, according to the ruling.
SEC Chair Gary Gensler advised fans to exercise caution when prominent persons offer financial advice in a news release posted on the SEC’s website.
“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,” the author stated.
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
“We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals,” he advised clients.
The judge added “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.”
According to Axios, a Kardashian spokesman claimed that the reality star had completely cooperated with the SEC.
According to the statement, “Ms. Kardashian fully cooperated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter.”
“She wanted to get this matter behind her to avoid a protracted dispute. The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits,” according to the statement.
The case, according to an SEC spokesman, serves as a reminder that the SEC’s standards must be adhered to.
More on this story via The Western Journal:
“The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion,” Gurbir Grewal, Director of the SEC’s Division of Enforcement, said in the SEC’s release. CONTINUE READING…