The latest Kim Kardashian crypto post has gotten the celebrity in hot water with federal authorities. The reality TV actress and influencer has settled SEC accusations that she failed to disclose a payment she received for promoting a cryptocurrency on her Instagram page, the agency revealed Monday morning.
The Kim Kardashian crypto post caused her to be sued
“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,” said Gary Gensler, chairman of the Securities and Exchange Commission, in a news release.
According to Gensler, the case also serves as a reminder that celebrities and others are required by law to report when and how much they are paid to encourage investing in securities.
What did Kim Kardashian get fined for?
According to the SEC, Kardashian, who is reportedly worth $1.8 billion, agreed to pay $1.26 million to settle the accusations stemming from a promotion on Meta’s Instagram for EthereumMax’s crypto asset. She will also comply with an ongoing investigation and has agreed not to market cryptocurrency securities for three years, according to the regulator.
The SEC stated that Kardashian, who has developed a media and lifestyle empire, neither confirmed nor rejected the regulator’s conclusions.
Kardashian’s lawyer said in a statement that she is relieved the situation has been concluded.
“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,” the statement said.
According to attorney Duncan Levin, who has represented convicted fraudster Anna Sorokin, aka Anna Delvey, the deal allowed Kardashian escape a considerably more intrusive process that could have included a deposition and document collection. It also provided the SEC with an opportunity to make an example of a star, he said.
“The SEC is interested in sending a message to other potential celebrity endorsers of securities, to make sure their posts are not misconstrued as financial advice,” Levin, a former federal prosecutor and asset forfeiture chief in the New York District Attorney’s Office, said.
Sharing what my friends just told me about the EthereumMax token…
Kardashian had already faced regulatory scrutiny for her EthereumMax promotion, which she shared on Instagram in June 2021:
“ARE YOU INTO CRYPTO???” she asked her almost 250 million Instagram followers. “THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUMMAX TOKEN.”
Some investors sued her, former NBA player Paul Pierce, and renowned boxer Floyd Mayweather Jr. earlier this year over their EthereumMax promotions, charging them of inflating the asset’s value.
The SEC charged Kardashian on Monday with failing to register that she was paid $250,000 by EthereumMax, via an intermediary, to write a post regarding EthereumMax tokens, a crypto asset issued by EthereumMax. The tweet, which contained the hashtag “#ad,” also provided a link to the EthereumMax website, which instructs visitors on how to purchase the tokens, according to the regulator.Her failure to disclose the payment was a violation of federal securities laws, the SEC said. The agency claimed that she agreed to pay $260,000, which included the amount she got plus interest, in addition to the $1 million penalty.
Which crypto Did Kim Kardashian promote?
Kardashian paid the SEC more than $1.2 million after promoting a cryptocurrency token called EthereumMax. Kim Kardashian agreed to pay the Securities and Exchange Commission $1.26 million in penalties to settle charges that she illegally promoted a cryptocurrency token on social media without reporting how much she was paid for the campaign, the SEC announced Monday.
What is cryptocurrency pump and dump?
A pump-and-dump scheme is a type of fraud in which the perpetrators gather a commodity over time, artificially inflate its price by disseminating false information (pumping), and then sell what they have accumulated to unsuspecting customers at a higher price (dumping).
