Kim Kardashian fined $1.26 million after promoting crypto on social media
Kim Kardashian will pay a $1.26 million fine after she promoted a cryptocurrency on social media without disclosing she’d been paid to do so.
The reality star had failed to disclose the $250,000 she was paid by cryptocurrency firm EthereumMax to promote its EMAX tokens, the US Securities and Exchange Commission said.
In the post promoting the tokens, Kardashian included a link to a website that displayed how to purchase the tokens. The post suggested that Kardashian had learnt of the tokens via “friends” and included a disclaimer that “this is not financial advice.”
She will now pay the fine and cooperate with the SEC in its ongoing investigation into cryptocurrencies promoted by celebrities. Last year, many celebrities gave their backing to new cryptocurrencies and the companies offering them. The SEC suggested that more punishment could come to celebrities as part of that investigation.
“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 SEC Chair Gary Gensler.
“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. We encourage investors to research potential investments rather than rely on paid endorsements from artists, sports figures, or other icons.”
The fine Kardashian received was made up of the $260,000 she was paid to promote the currency, plus a $1 million penalty. She also agreed not to promote any crypto assets for three years.
The SEC has been discussing the dangers of celebrity-promoted cryptocurrencies for quite some time. Back in 2017, it warned that people should be aware that such endorsements could be illegal if those celebrities do not disclose payments they have received.
