Kim Kardashian Charged by SEC for Touting of Crypto Security
The US Security and Exchange Commission has announced through a press statement that it has brought charges against a celebrity, Kim Kardashian. The Commission said the celebrity is being charged for touting a crypto security asset on social media without her stating how much she earned for the promotion.
Anti-Touting Laws
The said crypto asset is offered by EthereumMax. The Commission’s press release further stated that Kardashian has agreed to a settlement over the charge where she agreed to pay a penalty and interest worth $1.26 million. She would also cooperate with the US SEC in the course of its investigations regarding the crypto asset.
The Commission’s order discovered that Kardashian did not disclose her reception of $250,000 to make an Instagram post about EMAX’s crypto assets, the security offered by EthereumMax. The post she made contained a link to the provider’s website where visitors would find instructions on how to purchase the EMAX tokens.
The Chairman of the Security and Exchange Commission, Gary Gensler said in the release that the case is another reminder of the fact that the endorsement of investment opportunities by influencers or celebrities does not translate to it being a good investment for investors. He said further that investors should consider the potential risks any opportunity brings in tandem with their personal goals.
Beyond the Influencer
The case involving Ms. Kardashian equally serves to remind celebrities that they are required by law to state to the public when they get paid to promote investments, and how much they are paid, Gensler stated.
The Director of the SEC’s Enforcement Division, Gurbir Grewal, said the Federal Security law is clear on the matter. It states clearly that any individual who promotes crypto security has to disclose its source, nature, and the compensation they got for the promotion. Investors should know is the promotion of any security is without bias and Ms. Kardashian failed to reveal that.
The SEC said Kardashian went against the provisions in the anti-touting Federal Security laws. Kardashian agreed to pay the stated $1.26 million fine without either publicly admitting or denying the findings. The payment includes a $260,000 disgorgement fee which was the payment for the promotion she offered, and a fine of $1,000,000.
The SEC’s ongoing investigation is carried out by various officers of the Commission from its different units. And it is supervised by Mark R. Sylvester from the Crypto Asset and Cyber Unit.
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