WASHINGTON, Oct 3 (Portal) – Kim Kardashian has promoted everything from appetite-suppressing lollipops to melon-flavored liqueur to toilet paper, but it was her foray into the murky world of cryptocurrencies that landed her in hot water.
The reality TV star and influencer has agreed to settle charges related to illegally promoting a crypto security and to pay $1.26 million in penalties and fees, the U.S. Securities and Exchange Commission said on Monday .
Kardashian, who has 330 million followers on Instagram and 73.7 million followers on Twitter, has not disclosed that she received $250,000 from crypto firm EthereumMax for publishing an Instagram post about its EMAX tokens, the SEC said.
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The SEC in November 2017 warned celebrities looking to capitalize on the burgeoning digital asset space that US regulations require them to disclose if they’re paid to back crypto tokens.
It’s since hounded a handful of other celebrities, including action movie star Steven Seagal, record producer “DJ Khaled,” and boxer Floyd Mayweather Jr., for breaking that rule, but Kardashian is arguably the most notorious. Continue reading
Their post included a link to the EthereumMax website, which included instructions for potential investors on how to buy EMAX tokens. “Share what my friends just told me about the EthereumMax token!” read the post.
Under U.S. law, individuals promoting a particular stock or crypto security must disclose not only that they are being paid for it, but also the amount, source and nature of those payments, SEC Chairman Gary Gensler said Monday .
“That was really to protect the investing public — if someone is promoting this stock and whether that’s a celebrity or an influencer or whatever, and that’s what it’s all about,” Gensler said in an interview with CNBC.
Kim Kardashian arrives on the red carpet for the annual White House Correspondents’ Association Dinner in Washington, United States, April 30, 2022. Portal/Tom Brenner
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“I would like to acknowledge Miss Kardashian for the collaboration and continued collaboration. We really appreciate that,” Gensler added.
Kardashian has agreed to pay the fee without admitting or denying the SEC’s findings. Her attorney, Michael Rhodes, said Kardashian was pleased to have the case resolved.
“She wanted to get this matter over with to avoid a protracted argument. The agreement it has in place with the SEC allows it to do so so it can continue its many different business endeavors,” Rhodes said in a statement.
ONGOING LEGAL PROCEEDINGS
Kardashian is also named, along with boxer Mayweather and former basketball star Paul Pierce, in an ongoing lawsuit filed in January by investors who claim they suffered losses after the celebrities endorsed EMAX. Continue reading
According to website CoinMarketCap.com, EMAX tokens are down around 98% since June 13, 2021, when Kardashian told her then 225 million followers on Instagram about it.
Last month, Kardashian, which has expanded its presence in the financial world, launched a new private equity firm focused on investing in consumer and media companies.
Regulating the cryptocurrency markets has been high on the SEC Chairman’s agenda this year as digital asset prices have seen wild swings amid heightened recession fears, rising interest rates and geopolitical turmoil. read on read on
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Reporting by Doina Chiacu in Washington, Manya Saini in Bengaluru; additional reporting by John McCrank in New York; Edited by Louise Heavens, Alexander Smith and Aurora Ellis
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