American media personality and businesswoman Kim Kardashian has agreed to pay $1.26 million to the U.S. Securities and Exchange Commission (SEC) to settle charges relating to her failure to disclose a payment she received for promoting EthereumMax tokens on Instagram.
SEC penalize Kim Kardashian $1.26m
Today, the SEC fined Kim Kardashian over the illegal promotion of what the regulator has called “a crypto asset security.” The asset in question is EthereumMax( EMAX), which Kim shilled last year.
The reality Tv star shared content that provided instructions for potential investors to purchase EMAX tokens to her 331 million followers on Instagram but failed to disclose a payment of $250,000 she received for publishing the post, the securities watchdog said.
Kim has agreed to pay $1.26 million in penalties, disgorgement, and interest, though neither formally admits to or denies the findings. She will also cooperate with an ongoing probe by the regulator into the EMAX project and has agreed not to shill any cryptocurrencies for the next three years.
The “Keeping Up With the Kardashians” Star is not the only celebrity who promoted EthereumMax. Professional boxer Floyd Mayweather also touted the Ethereum-based token in 2021. Kardashian and Mayweather were slapped with a class-action lawsuit in January 2022 by disgruntled investors of EMAX.
SEC chair comments on the charges
SEC chair Gary Gensler urged the general public to do their research before investing in crypto assets.
“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. We encourage investors to consider an investment’s potential risks and opportunities in light of their financial goals.”
Today @SECGov, we 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
Gensler also reminded celebrities and influencers of their responsibility to disclose payments relating to promotions of crypto securities. “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,” the SEC boss added.
The EMAX price spiked 1400% last May to hit a historic high of $0.000000597636, according to CoinGecko data. The token has lost 99.91% of its value since then to trade at $0.000000005622 at publication time.