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The American television star Kim Kardashian agreed to pay a million dollar fine to the United States Securities Commission, which accused her of not disclosing -as she should- that the EthereumMax company paid her to promote its cryptocurrencies on social networks.
Kim Kardashian has touted everything from appetite-suppressing tablets to melon-flavored liqueur and toilet paper, but it was her foray into the enigmatic world of cryptocurrencies that got her into trouble.
According to the United States Securities and Exchange Commission (SEC), with more than 330 million followers, the TV star recommended EMAX tokens on Instagram without making it clear that EthereumMax had given him $250,000 to do this. pattern.
For this, they filed federal charges that ended in an agreement signed by the artist in which she accepted the payment of 1.26 million dollars and the waiver of the money received for the publication on Instagram, plus interest. Kardashian will also be barred from promoting crypto on her social media for three years, even if she specifies that she is receiving money.
The post that sparked the legal discord contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.
“Sharing what my friends just told me about the EthereumMax token!” the message said, with no warning that it was paid advertising.
A regulation that many artists have violated
In November 2017, the SEC warned celebrities looking to cash in on emerging digital assets that they are required by rules to disclose when they are paid to back crypto tokens.
Since then, the market regulator has gone after a handful of celebrities, including movie star Steven Seagal, music producer ‘DJ Khaled’ and boxer Floyd Mayweather Jr. for breaking that rule.
Kardashian, Mayweather and former basketball star Paul Pierce are listed in an ongoing lawsuit filed in January by investors who allege they suffered losses after celebrities promoted EMAX.
The SEC said Kim Kardashian was paid $250,000 to post on her Instagram account about EMAX tokens, a crypto asset offered by EthereumMax.
She didn’t admit or deny the regulator’s allegations in settling the case https://t.co/oUpBPD5SeH
—Bloomberg Crypto (@crypto) October 3, 2022
SEC Chairman Gary Gensler recalled that the law requires that People promoting certain crypto stocks or securities must disclose not only that they are being paid to do so, but also the amount, source, and nature of those payments.
The value of many cryptocurrencies has skyrocketed during the pandemic amid a surge in highly speculative investment. But more recently, amid a decline in the general markets, the value of many cryptocurrencies has plummeted.
Bitcoin has lost more than half its value in 2022, falling below $20,000. While the Ethereum Max token promoted by Kardashian has dropped in value by more than 90% since its peak reached last May.
With Reuters and AP
