Learn why Kim K was fined over $1 million by the Securities and Exchange Commission for a sponsored social media post promoting the EthereumMax cryptocurrency.
Apparently the SEC has been keeping up with the Kardashians.
On Monday, Kim Kardashian was fined $1.26 million by the Security and Exchange Commission after the reality TV star failed to reveal that she received a hefty payday — $250,000, to be exact — in exchange for touting the EthereumMax cryptocurrency in a recent Instagram post.
The prolific reality TV star and entrepreneur agreed to pay the fine, will cooperate amid the federal agency’s ongoing investigation, and will not promote any crypto securities for three years.
As Gurbir Grewal, Director of the Enforcement Division of the SEC and the former Attorney General of New Jersey, said in an official statement:
“[A]ny 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.”
“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,” SEC Chairman Gary Gensler added on the occasion.
As for Kim K, well, the penalties won’t affect her a whole lot beyond losing what is essentially chump change for someone of her impressive fortune.
“[Kardashian] wanted to get this matter behind her to avoid a protracted dispute,” her attorneys said in a statement. “The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits.”
The SEC said that Kardashian had 225 million Instagram followers at the time of the post, and even though she included the “#ad” hashtag (among many others), that notation alone is not enough to comply with federal regulations with regards to flexing these types of crypto investments, as Gensler explained in an interview with CNBC.
It’s pocket change for Kim K, of course, whose net worth is estimated at $1.8 billion. Comparing that to the average American family with a household income of $122,000, the fine is the equivalent of less than $100, relatively speaking.
(Devastating, to be clear.)
Alas, she isn’t the first to get in trouble for this particular banned practice, and most likely won’t be the last; boxer Floyd Mayweather, DJ Khaled, and actor Steven Seagal have all been fined for touting crypto securities without proper disclosure.
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