Kim Kardashian Forced To Pay $1.26M By SEC For Illegal Promotion Of Cryptocurrency, Brandished As An Example In Image Threatening Move
Kim Kardashian has yet again found herself on the wrong side of the law and is now compensating for the same. Just a few weeks ago, Kim K was embroiled in a $40 million class action lawsuit for committing a lottery scam along with Scott Disick. And now the beauty mogul is paying $1.26 million to settle charges by the Securities and Exchange Commission. The matter? Promoting a crypto asset security without revealing that she had been paid to do the same. Looks like it was about time Kim K kickstarted her law career for good…
Kim Kardashian breaks the law?
The entire matter boils down to simple facts. Kim Kardashian is one of the most famous personalities in the world with one of the most-followed Instagram accounts – currently 301 million followers. The reality star shared a post on her Instagram account advertising EMAX tokens – EthereumMax’s crypto asset security. She even linked her post to the EthereumMax website, which had further instructions with reference to purchasing the aforementioned EMAX tokens.
The problem came in when the Keeping Up With The Kardashians star did not divulge that she had been paid an amount of $250,000 for the promotion, as per SEC’s order.
The settlement that Kardashian opted for without “admitting or denying the SEC’s findings,” does not simply make her pay $1.26 million as compensation, but also mandates that she does not promote any crypto asset securities for a period of three years.
SEC’s reminder to other celebrities
The SEC chairperson Gary Gensler issued a statement regarding the charges:
“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. 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.”
According to SEC’s order, Kim K violated the anti-touting provision of federal securities laws, and the investigation still continues. The $1.26 million compensation entails a million dollars in penalty and $260,000 in disgorgement (the amount she received for the promotion plus prejudgment interest).
Apparently, the consumers have time and again been warned of “potentially unlawful celebrity-backed crypto asset offerings.” Back in 2017, SEC had stated that celebrity endorsements “may be unlawful if they do not disclose the nature, source and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement.”
Further, potential investors needed “to be wary of investment opportunities that sound too good to be true. We encourage investors to research potential investments rather than rely on paid endorsements from artists, sports figures, or other icons.”
Kim Kardashian is quite easily finding, intentionally or not, ways to remain in the news. But she must be ruing these headlines which do not paint a good picture of her already ambiguous image.
