New York
CNN Business
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Kim Kardashian agreed to pay a $1.26 million fine to the Securities and Exchange Commission to settle civil charges after the reality star promoted a crypto asset, EthereumMax, on Instagram.
The SEC charged Kardashian with failing to disclose that she was paid $250,000 to post her Instagram post. In addition to paying the fine, she agreed to cooperate with the SEC’s ongoing investigation.
“This case is a reminder that when celebrities or influencers endorse investment opportunities, including crypto-asset securities, it does not mean that those investment products are suitable for all investors,” said SEC Chairman Gary Gensler. “We encourage investors to consider the potential risks and opportunities of an investment in light of their own financial objectives.”
Kardashian also agreed not to promote any crypto securities for three years.
“Minsecond. Kardashian is pleased to have resolved this matter with the SEC,” a statement from her attorneys said. “Kardashian fully cooperated with the SEC from the beginning and remains willing to do everything possible to assist the SEC in this matter. “He wanted to put this matter behind him to avoid a protracted dispute. The settlement he reached with the SEC allows him to do that so he can get on with his many different business activities.”
The SEC found that Kardashian violated the anti-advertising provision of the federal securities laws. Kardashian agreed to the order without admitting or denying the SEC’s findings.
The settlement includes a $1 million penalty and forfeiture of the $250,000 payment he received, plus interest.
Executioner tweeted that “the incentives of any celebrity or influencer are not necessarily aligned with yours.” He said the investing public should not confuse the skills of Famous “with the very different skills required to offer adequate investment advice.”
The SEC may have targeted Kardashian as a way to send a message to other influencers who might be promoting cryptocurrencies or other investment assets, said Charles Whitehead, a professor at Cornell Law School. He called it a “crossfire” for celebrity crypto backers.
“It’s a way of pointing the finger at other influencers: If you’re thinking about dealing with crypto, think twice,” Whitehead said. “The SEC is also using her as an influencer, but to push compliance with securities laws. [It’s a] Clever way to draw attention to the issue so others don’t.”
Kardashian is not the first celebrity to pay a fine from the SEC for using her influence to boost cryptocurrencies. In 2018, boxer Floyd Mayweather Jr. and music producer DJ Khaled paid fines for promoting cryptocurrencies. Mayweather, who was awarded $300,000 in compensation, paid just over $600,000 in fines, while Khaled, who was paid $50,000, was fined more than $150,000. Additionally, actor Steven Segal paid more than $300,000 in fines for doing the same thing in 2020.
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– Source: CNN Business
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In an Instagram post from June 13, 2021, Kardashian wrote, “Are you interested in crypto? This is not financial advice but to share what my friends told me about the max ethereum token!” She added different hashtags, including #ad, along with #emax and #disrupthistory, among others.
The SEC said he had 225 million followers on Instagram at the time of publication.
The #announcement is not enough to comply with SEC laws regarding promoting investments, Gensler said in an interview on CNBC on Monday.
“If you are advertising perfumes, vacation homes or anything else on the Internet, there are various laws related to that. But these are the securities laws,” she said.
Kardashian’s net worth is estimated at $1.8 billion according to Forbes. So a $1.26 million fine is the equivalent of a fine of less than $100 for a typical American family, which has a net worth of about $122,000 according to the latest Federal Reserve estimates.