Kim Kardashian has to pay $1.26m for unlawfully promoting crypto
All of this comes from an Instagram Story promoting Ethereum Max.
Kim Kardashian will pay the SEC $1.26 million after it charged the influencer with unlawfully advertising a crypto investment.
In a filing, the SEC found Kardashian had promoted a token offering by EthereumMAX to her 225m Instagram followers in exchange for a payment of $250,000.
The Commission alleged that Kim Kardashian failed to disclose the nature of her relationship with Ethereum Max, or that she was paid for her post.
The advertisement, which appeared as an Instagram Story, read: “Are you guys into crypto??? This is not financial advice but sharing what my friends just told me about the Ethereum Max Token.”
“A few minutes ago Ethereum Max burned 400 trillion tokens – literally 50% of their admin wallet – giving back to the entire E-Max community,” it continued.
Although Kardashian included the hashtag “#ad” with her post, SEC rules require promoters of securities to be totally transparent with their audiences.
Under US anti-touting law, she should have disclosed the “nature, scope, and amount of compensation” she received.
As part of the settlement, Kardashian has agreed to cease promoting cryptocurrencies and crypto-related products for three years. She is also obliged to continue cooperating with the SEC’s further investigations.
The $1.26m penalty consists of a $1m fine, a $250,000 disgorgement, and prejudgement interest of $10,415.35.
EthereumMax currently faces a class-action lawsuit from investors. The suit alleges the company is a pump-and-dump scheme.
It goes on to say it weaponized the clout of well-known celebrities to inflate the price of its tokens.
The lawsuit also lists Kardashian, former boxer Floyd Mayweather, basketballer Paul Pierce, and other celebrities as named defendants.
Ethereum Max debuted with a price of $0.00000017 in mid-2021, according to CoinMarketCap. The following month, its EMAX tokens soared in value by almost 1,000 percent before swiftly declining to their original levels.
Have any thoughts on this? Carry the discussion over to our Twitter or Facebook.
- Did a stranger send you a private crypto key? It’s probably a scam
- Coinbase says it could keep your crypto if they go bankrupt
- Here’s what NFTs on Instagram will look like
- LG Art Lab bringing NFTs to LG smart TVs, but does anyone care?