The United States SEC charged the American celebrity and influencer for promoting a cryptocurrency asset security without disclosing payments received to her followers. 1056 Total views 29 Total shares Listen to article 0:00 News American socialite Kim Kardashian will pay $1.26 million in penalties for her involvement in the promotion of a cryptocurrency scheme called EthereumMax (EMAX).
The United States Securities and Exchange Commission (SEC)announced the charges against Kardashian on Oct. 3 for “touting on social media a crypto asset security offered and sold by EthereumMax” without disclosing the payment received for her promotional involvement.
Kardashian has agreed to settle the charges and pay $1.26 million in penalties, disgorgement and interest and is set to cooperate with further investigations by the SEC into the EthereumMax project.
The announcement noted that Kardashian failed to disclose a $250,000 payment she had received to publish a post on her Instagram profile promoting EMAX tokens with a link to the projects website.
The order by the SEC finds that Kardashian violated the anti-touting provision of federal securities laws. This has been the case with other prominent cryptocurrency securities violations involving the SEC in the past.
Kardashian neither admitted or denied the SECs findings but agreed to settle the charges. This was broken down into $260,000 in disgorgement as well as a $1 million penalty. Kardashian has also agreed to not promote any cryptocurrency assets until 2025.
Today @SECGov, we charged Kim Kardashian for unlawfully touting a crypto security.
This case is a reminder that, when celebrities / influencers endorse investment opps, including crypto asset securities, it doesnt mean those investment products are right for all investors. Gary Gensler (@GaryGensler) October 3, 2022
SEC chairman Gary Gensler also used the order to advise the general public to do their due diligence when investing in cryptocurrency assets, while reminding celebrities and influencers of their obligation to disclose payments relating to promotions of securities. “This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesnt mean that those investment products are right for all investors. We encourage investors to consider an investments potential risks and opportunities in light of their own financial goals.”
Kardashians legal team also filed a motion to set aside a class-action complaint aimed at the businesswoman and other American celebrities in August 2022. Kardashian and a handful of other prominent American social media influencers were served with a class-action complaint in January 2022 over claims they misled investors through the social media promotion EthereumMax.
Kardashian posted Instagram stories promoting the project in June 2021, with the likes of boxing great Floyd Mayweather also embroiled in the lawsuit after promoting the Ethereum-based token in the build-up to a celebrity boxing bout against YouTuber Logan Paul during the same period.
Fans could purchase pay-per-view tickets with the token, which surged after the promotion by Kardashian and other influencers. The value of EthereumMax dropped significantly afterward, leaving many out of pocket.
The original court filing that listed Kardashian, Mayweather and eight others claimed that company executives had collaborated with celebrity promoters to make misleading statements about the token and their control of the majority of tokens. Steve Gentile and Giovanni Perone were listed as co-founders of the project. #Cryptocurrencies #Security #Investments #SEC #Crimes #Regulation Related News What is impermanent loss and how to avoid it? Enhanced KYC checks can be a win-win for crypto exchanges and consumers here’s why California fraud cases highlight the need for a regulatory crackdown on crypto The future of DeFi is on TikTok US Treasury plans to ask public if crypto-related regulations are ‘no longer fit for purpose’ The crypto industry can trust Cynthia Lummis to get regulation right
