769
views

SEC Charges Kim Kardashian $1.3 Million for Promoting Crypto Without Disclosure

The American celebrity Kim Kardashian has been forced to pay a $1.26 million fine by the Securities and Exchange Commission (SEC). 

The fine pertains to her undisclosed promotion of EthereumMax (EMAX) over Instagram. She failed to reveal that she was paid $250,000 to promote the token. 

Kim Kardashian Promoting Crypto?

Per a statement from the SEC on Monday, Kardashian’s problematic post contained a link to the Ethereum Max website, and instructions for purchasing EMAX tokens. 

The Instagram story said Kardashian’s “friends” told her that EthereumMax had just burned half of their admin wallet to “give back to the community.” Burning a token means removing units from its supply, which is generally bullish for its price. 

However, SEC Enforcement Division Director Gurbir S. Grewal explained that investors are entitled to know whether such promotions are paid for. This is so that investors can identify whether its promotion is biased or not. 

“This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto-asset securities, it doesn’t mean that those investment products are right for all investors,” said SEC Chair Gary Gensler on the matter. 

Gensler also released a video statement about the commission’s action against Kardashian over Twitter. He stressed that celebrity fame does not necessarily translate to an ability to offer strong investment advice. “When it comes to crypto, remember many of these are highly speculative assets,” he added. 

Kim Kardashian to pay $1.3M fine to settle SEC charges over crypto promo
Kim Kardashian. Source: NBC News

Kardashian did not admit to or deny the SEC’s findings, but fully cooperated with the investigation and agreed to pay settlement charges. These include $260,00 in disgorgement, and $1,000,000 as a penalty. 

Since the SEC’s announcement, EMAX is up 35% on the day. 

Most Cryptos are Securities: Gensler

Gensler expanded on the settled case in an interview with CNBC’s Squawk Box. Similar charges, he said, have been levied against other celebrities promoting crypto tokens including Floyd Mayweather, DJ Khaled, and others. 

Gensler reiterated that most cryptocurrencies are in fact securities – meaning they pass the Howey test and fall under SEC jurisdiction. 

“The law is clear on this. I believe based on the facts and circumstances most of these tokens are securities,” he said. 

Bitcoin live price
Btc
Bitcoin
$16.937,62
price
1.15623%
price change
BUY NOW

Gold bug and Bitcoin critic Peter Schiff questioned the SEC on Monday why it hadn’t levied similar charges against Michael Saylor for his frequent promotion of Bitcoin. However, Gensler has stated in the past that he views Bitcoin as a commodity, and not a security. 

Stay up to date with our latest articles