The United States Securities and Exchange Commission (SEC) has recently charged renowned American media personality Kim Kardashian for illicit social media promotion of a crypto token offered by EthereumMax (EMAX).
SEC stated in a statement on October 3 that Kardashian did not disclose the payment she got for promoting the contentious cryptocurrency EMAX.
However, the matter was settled by mutual consent of the parties, with the celebrity agreeing to cooperate with the SEC’s ongoing investigations and paying $1.26 million in fines, disgorgement, and interest.
According to the statement, Kardashian did neither admit nor deny the allegations made against her. About $260,000 in disgorgement, prejudgment interest, and a $1,000,000 penalty were included in the fine.
In this instance, the SEC found that Kardashian received $250,000 in exchange for posting about EMAX tokens on her Instagram account. Additionally, she is banned from supporting any cryptocurrency projects for the subsequent three years.
This incident serves as a warning that just because a celebrity or other influential person recommends a financial product, including securities backed by cryptocurrencies, doesn’t guarantee that it is suitable for all investors. According to SEC Chair Gary Gensler, we advise investors to weigh an investment’s potential risks and opportunities against their individual financial objectives.
According to the allegations, the defendant sent investors a link to the EthereumMax website that explained how to interact with the asset.
Kardashian case is just an example
The SEC also noted that the Kardashian case should serve as an example at a time when celebrities have come under fire for promoting cryptocurrency projects without delivering disclaimers.
According to Gensler, the SEC decided that Kardashian had broken the law, and the sanctions imposed are a result of the Securities Act’s conventional financial industry. The chair added that other celebrities, such as the boxer Floyd Mayweather and musician v c, had already faced charges for promoting crypto security tokens without providing sufficient disclosure.