The Securities and Exchange Commission (SEC) has charged reality TV star Kim Kardashian with unlawfully advertizing crypto project EthereumMax without disclosing the payment she had received for a sponsored promotion, per the SEC press release.
According to the SEC, Ms. Kardashian failed to clearly state that she had received $250,000 to promote EMAX tokens on her Instagram account, where 331 million people follow the celebrity, as required by law. The event is considered by the SEC to have violated anti-touting provisions of federal securities laws.
Kardashian has agreed to pay $1.26 million in penalties, disgorgement, and interest, and vowed to not promote any crypto asset securities for a period of at least three years.
“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 said on Twitter.