Kim Kardashian fined $1.26 million for promoting crypto project
American reality star Kim Kardashian has agreed to pay a $1.26 million fine for illegally promoting crypto project EthereumMax (EMAX).
As the US Securities and Exchange Commission reported today, October 3, it accuses Kardashian of “promoting the EthereumMax cryptocurrency on social media” without disclosing that this is advertising for which it is paid .
Kardashian has relented in the lawsuit and is complying with the request to pay the sum of $1.26 million in penalties and damages plus interest. In addition, she will support all further investigations by the SEC against EthereumMax.
According to the SEC’s announcement, Kardashian did not clearly disclose that she received a $250,000 fee for promoting the project and its cryptocurrency, EMAX, on her Instagram account.
According to the SEC, the celebrity violated the legal requirements for advertising investment products. The authority had made similar allegations against other well-known people in the past.
Kardashian, while not explicitly agreeing with this reading, acknowledges the requirement that goes with it. This consists of $260,000 in damages plus a $1 million penalty. In addition, the reality star promises to stop advertising any crypto projects at least until 2025.
Today @SECGovwe 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
SEC boss Gary Gensler also uses the sensational case to issue a warning to investors on social networks, reminding them that celebrities and influencers are not suitable advisors for investment decisions:
“This case reminds us that when celebrities and influencers are promoting investment products, including cryptocurrencies, they are not necessarily the right choice for investors. We encourage all investors to carefully weigh the potential rewards and risks of an investment product against the background of their own financial goals.”
Meanwhile, in the civil class action lawsuit filed against Kardashian and other celebrities in the EthereumMax case, the it girl’s attorneys have filed for a dismissal. In January 2022, the related class action lawsuit was filed against Kardashian and several celebrities for promoting the crypto project.
Kardashian had promoted the project and the associated cryptocurrency in June 2021 along with other stars such as boxer Floyd Mayweather.