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Crypto ban: Kim Kardashian pays $1.26m to SEC for plugging EMAX on Instagram

By Alara Jordan

Edited by Charlie Mellor

12:46, 3 October 2022

Kim Kardashian
Kardashian is said to have received $250,000 (£223,000) in exchange for promoting the token to her 330 million Instagram followers – Photo: Getty Imges

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.

DOGE/USD

0.14 Price
-2.250% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

SOL/USD

180.34 Price
-1.660% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

BTC/USD

67,451.05 Price
-0.440% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

XRP/USD

0.61 Price
+1.310% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

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.

Markets in this article

META
Meta Platforms Inc (Extended Hours)
484.56 USD
6.68 +1.400%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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