Crypto ban: Kim Kardashian pays $1.26m to SEC for plugging EMAX on Instagram
Kim Kardashian has been charged $1.26m (£1.12m) by the Securities and Exchange Commission (SEC) for not disclosing a payment she received for posting about crypto security tokens sold by EthereumMax.
Kardashian, the eighth most-followed person on Instagram which is owned by Meta Platforms (META), is said to have received $250,000 (£223,000) in exchange for promoting the token EMAX to her 330 million Instagram followers, but failed to disclose she had been paid to do so.
The post included a link to the EtheruemMax website with instructions on how to buy EMAX.
The $1.26m includes almost $260,000 in disgorgement – representing her original advertisement payment – plus prejudgment interest and a $1m penalty.
A statement from the SEC said Kardashian violated the anti-touting provision of the federal securities laws. She has not admitted or denied the SEC’s findings.
Meta Platforms (META)
Kardashian banned from promoting crypto assets for three years
The statement adds that Kardashian will not be able to promote any crypto assets for three years, with the SEC issuing a warning video to investors to not to make investment decisions based “solely on the recommendations of a celebrity or influencer”.
SEC chair Gary Gensler said: “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.
“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,” Gensler added.
Today @SECGov, we charged Kim Kardashian for unlawfully touting a crypto security.
— Gary Gensler (@GaryGensler) October 3, 2022
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.
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