SEC vs Kim Kardashian: the star will pay a fine for crypto advertising
The US Securities and Exchange Commission accuses Kim Kardashian of illegal crypto advertising on social networks. The star didn't inform them that she was paid to promote EMAX tokens.
Earlier the celebrity published a post on her Instagram account about EMAX tokens. Kardashian’s post contained a link to the EthereumMax website, which provided detailed instructions for potential investors to purchase EMAX tokens. However, Kardashian did not indicate that this ad integration was paid.
As it turned out, the celebrity received $ 250,000 for promoting EMAX. According to the SEC order, it is required to disclose the amount of compensation a person received in exchange for the promotion of specific crypto. Since the fact of payment was hidden, the regulator, headed by Gary Gensler, charged Kim Kardashian with illegal advertising of digital currencies.
Gurbir Grewal, director of the SEC’s division of enforcement, said: “The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion.”
In order to protect investors, regulator representatives insist on the need to disclose the objective relationship of celebrities to the advertised crypto assets. Otherwise, media fans can be influenced by idol’s approval and make inappropriate investment decisions.
We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals,Gensler said.
The SEC’s order finds that Kardashian violated the anti-touting provision of the federal securities laws. She did not comment on the charges, Kardashian agreed to pay the aforementioned $1.26 million, including a refund for the promotion plus prejudgment interest, and a $1,000,000 penalty. In addition, the celebrity is prohibited from advertising any crypto assets for three years.
The SEC chairman is convinced: “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.”