The United States Securities and Exchange Commission (SEC) has asked popular American celebrity Kim Kardashian to pay $1.26 million. The amount is to be paid as fine for her role in promoting a crypto project called EthereumMax (EMAX), to her followers.
Kim Kardashian Violated Securities Laws, Says U.S. SEC
According to the U.S. SEC, Kim took advantage of her social media platform to advertise EMAX to her followers without disclosing that she was paid to do so. Per the regulator’s announcement, Kim was paid no less than $250,000 to put out the Instagram post where she promoted the EMAX tokens. The influencer even reportedly added a link to the project’s website.
By SEC’s standards, however, Kim flouted existing laws that prohibit such moves, thus necessitating the fines. The influencer will first cough up $260,000 in disgorgement. Then she’ll pay another $1 million as a penalty.
Interestingly, Kardashian has agreed to pay the settlement while distancing herself from any crypto promotions until 2025. She even offered to cooperate with the regulator if there is a need to further investigate the EthereumMax project. But it is worth mentioning that Kardashian did not exactly agree with SEC’s allegations or deny them.
SEC Chair Asks Investors to Research Before Investing In Any Crypto Scheme
Following the charge, SEC chairman Gary Gensler seized the opportunity to advise investors. He asked them to be wary of investing in assets just because a celebrity backs them. He insists they must carry out their due diligence before going in. Part of his statement read:
“We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
Additionally, Gensler also warned celebrities and other individuals with large followers. For their part, they must always disclose payments received when promoting securities.
Meanwhile, there is still an ongoing class-action suit against Kardashian and several other celebrities. This is in connection with their various roles in misleading investors during the promotion of EthereumMax. However, Kardashian’s legal team has now filed a counter motion against the suit.