Kim Kardashian has agreed to pay a $1.26 million fine to the Securities and Exchange Commission (SEC) due to what may have been an unlawful promotion of a new digital currency known as Ethereum Max.
Kim Kardashian Settles with the SEC
Kardashian is not in trouble for promoting the currency. This happens all the time with celebrities, though what Kardashian allegedly failed to do was tell all her social media followers she was promoting the asset that she had garnered more than $250,000 to engage in the promotion.
In her posts, Kardashian posted links that investors could visit if they wanted to purchase the token or invest their hard-earned cash. Without admitting to any wrongdoing, she has agreed to pay the set fine in a settlement with the agency as it conducts its ongoing investigation into the asset.
Gurbir Grewal – director of the SEC’s division of enforcement – explained in a recent statement:
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.
SEC head Gary Gensler said that the present case will serve as a reminder to all celebrities, and should they decide to get involved in crypto and promote assets, they will play by the rules and be clear and transparent with their fans. He mentioned:
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. We encourage investors to consider an investment’s potential risks and opportunities [given] 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.
In a separate notification, an unnamed lawyer for Kardashian mentioned that the reality star is pleased to have the issue off her shoulders and is looking forward to moving on with her life and with other projects. The lawyer commented:
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. She wanted to get this matter behind her to avoid a protracted dispute. The agreement she reached with the SEC allows her to do that so she can move forward with her many different business pursuits.
A Big Celebrity Becomes a Big Example
With over 300 million followers on Instagram alone, Kardashian is arguably one of the most talked about celebrities of the day.
This could be why the SEC is choosing to make an example of her.