Kim Kardashian fined $1.26 million for unlawfully promoting cryptocurrency
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Kim Kardashian has received a whopping $1.26 million (£1m) fine for backing and promoting a cryptocurrency.
She has been ordered by the US Securities and Exchange Commission (SEC) to pay $1.26 million for her role in backing and promoting EthereumMax, 'without disclosing the payment she received for the promotion'.
Kardashian accepted the fine 'without admitting or denying the SEC’s findings'.
The Skims founder was found guilty of having 'violated the anti-touting provision of the federal securities laws' by not having disclosed she was paid a sum of $250,000 (£223,000) to upload an Instagram post - which included a link to EthereumMax's website - about the cryptocurrency's EMAX tokens.
Director of the SEC’s Division of Enforcement, Gurbir Grewal, explained: "The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion.
"Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information."
Today we announced charges against Kim Kardashian for promoting a crypto security offered by EthereumMax without disclosing the payment she received for the promotion.— U.S. Securities and Exchange Commission (@SECGov) October 3, 2022
Kardashian agreed to settle the charges, pay $1.26 million, and cooperate with the investigation.
The $1.26 million fine Kardashian has received includes 'approximately $260,000 in disgorgement, which represents her promotional payment, plus prejudgment interest, and a $1,000,000 penalty'.
According to the SEC, as well as accepting the fine, Kardashian has also 'agreed to not promote any crypto asset securities for three years.'
However, the investigation into 'celebrity-backed crypto asset offerings' doesn't end with Kardashian, and is ongoing.
Gary Gensler, the chair of the US Securities and Exchange Commission, noted the case is 'a reminder' for all celebrities and influencers that when they 'endorse investment opportunities, including crypto asset securities, it doesn’t mean that those investment products are right for all investors'.
He concluded: "We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.
"Ms Kardashian’s case also serves as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities."
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