Did Kim Kardashian Pay $1.25 Million in Fines for Promoting Crypto?
Reality TV star Kim Kardashian’s involvement in crypto landed her in trouble with federal regulators.
The social media influencer has agreed to pay a $1.26 million fine after promoting a crypto asset in an Instagram post and failing to disclose her $250,000 compensation in exchange for the promotion, according to CNN.
The assets promoted were EMAX tokens, offered by EthereumMax. Kardashian’s post linked to EthereumMax’s website, where potential investors found instructions on how to buy tokens, the Securities and Exchange Commission said in a press release.
How Kim Kardashian broke the law with crypto campaign?
SEC Chairman Gary Gensler said this case should serve as a reminder to investors to consider opportunities endorsed by celebrities or influencers.
“We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals,” he said in the press release.
He added that her case should also remind celebrities to disclose their compensation when promoting investment opportunities, as required by law.
This means disclosing “the nature, source and amount of the compensation they received in exchange for the campaign,” explained Gurbir S. Grewal, the director of the SEC’s Division of Enforcement.
“Investors have a right to know whether the publicity of a security is objective, and Kardashian failed to disclose that information.”
Kardashian’s lawyers told CNN that she is “pleased to have resolved this matter with the SEC.”
“Kardashian cooperated fully with the SEC from the very beginning, and she remains willing to do everything she can to assist the SEC in this matter,” the attorneys added. “She wanted to get this matter behind her to avoid a protracted dispute. The agreement she reached with the SEC allows her to do so so that she can move forward with her many different business activities.”
Investors uncover crypto hype
In a June 2021 Instagram post, the reality star – who has 250 million followers – wrote: “ARE YOU INTO CRYPTO??? THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN,” according to CNBC .
The post included hashtags such as #ad, #emax and #disrupthistory.
Kardashian, former NBA star Paul Pierce and boxing star Floyd Mayweather Jr. was sued by investors earlier this year for “artificially inflating the value of the asset,” the report added.
According to Vox, the SEC has been more willing to regulate cryptocurrency investment schemes that fall under their jurisdiction.
This was evident when the agency sued Coinbase for trying to launch a program called Lend, which would allow an investor to borrow USDC, a form of crypto whose value is tied to the US dollar, another Vox report explained.
What is Kim Kardashian’s net worth?
According to Forbes, Kardashian has a net worth of nearly $1.8 billion, making the SEC fine seem like a drop in the ocean.
This news comes on the heels of the launch of her latest business venture – concrete home decor, like tissue boxes (available for $89) and wastebaskets ($129).
The reality star launched a private equity company earlier in September. Apart from that, she owns Skims, a shapewear and loungewear brand.
She also sold beauty products under KKW Beauty and perfumes under KW Fragrance, but Kardashian took a break from the brand and told fans to expect reinvented products sometime in the future, according to Seventeen.
