SEC Charges Kim for Crypto EMAX Promo

• Kim Kardashian agreed to make a payment of 1.26million to the SEC for violating rules.
• The SEC warns against potentially unlawful celebrity-backed crypto-asset offerings. 

Kim Kardashian, an American idol, and businesswoman is facing a fine by the SEC for failing to disclose a payment that she received from EMAX. The model received a payment of $250,000 for publishing promotion EMAX tokens on her Instagram page last June. Kardashian failed to report this business deal according to a report from the SEC.

In her post, Kim stated,

Are you into crypto?? This is not financial advice but sharing what my friends just told me about the Ethereum max token.

Kardashian, 41, rose to prominence through the reality show Keeping Up with the Kardashians, which first aired in 2007. Kim Kardashian has one of the most followers on the social platform.

CNBC: Kim Kardashian is being charged by the SEC for her promotion of a crypto currency and agrees to pay a $1.26 million fine for failing to disclose that she was paid to promote EMAX tokens on Instagram.

— Tom Winter (@Tom_Winter) October 3, 2022

The Kardashian agreed to make a payment of $1.26million to the SEC. Gary Gensler explains that her failure to disclose the commission violated federal securities law. The Fine seems to be ridiculously high, but according to calculation, the amount paid to her was $250,000, in addition to $100,000 interest and a penalty of $1,000,000 summing up to $1.26million.

Kardashian was angered by the SEC taking action, she stated that she would not do any promotion related to cryptocurrency for the next three years. She added that she would cooperate with the ongoing investigation while neither admitting nor denying the accusations made.

The post drew intense scrutiny even prior to the involvement of the SEC. Along with former NBA player Paul Pierce and boxer Floyd Mayweather Jr., Kardashian was sued by investors, who accused the celebrities of artificially inflating the value of the asset.

The SEC made it clear that the Kardashian case should serve as a reminder to others and any that might fall victim to unregulated crypto promotions.

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, Investors are entitled to know whether the publicity of security is unbiased, and Ms. Kardashian failed to disclose this information.

Said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.

Gensler says the 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. Investors are encouraged to consider an investment’s potential risks and opportunities in light of their own financial goals.