Fakoyejo OlalekanThe United States Securities and Exchange Commission (SEC) has fined Reality TV star, Kim Kardashian, for partaking in a cryptocurrency promotion which was later described as a “pump and dump” scheme.
Kardashian was fined $1.26 million in penalties after promoting EMAX crypto tokens on her Instagram page, informing her users that she was introduced to it by her friends.
Whereas, she was paid $250,000 by EthereumMax to promote EMAX crypto tokens. Her failure to inform followers that the content was a promotion led to the fine.
“Kardashian’s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.” The US SEC said.
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The commisson’s head, Gary Gensler, further stated, “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.” Adding that, “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
Gensler explained that it is a reminder to celebrities to always disclose when their social media content is a promotion, “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.”
Meanwhile, Kardashian’s spokesperson, said, “Ms. Kardashian is pleased to have resolved this matter with the SEC.
“Kardashian fully cooperated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter.”
The spokesperson explained, “She wanted to get this matter behind her to avoid a protracted dispute.” Adding, “The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits.”
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