During June of the year 2021, the renowned socialite Kim Kardashian shared a post on her personal Instagram profile discussing the reliability of digital assets, specifically highlighting EthereumMax. In her statement, she mentioned, “I am not dispensing financial counsel but passing along what my acquaintances informed me about the ethereum max token!” She appended hashtags like “#ad” and “#emax.”
In actuality, this post served as a sponsored endorsement on behalf of EthereumMax, compensating Kardashian a sum of $250,000 for the exposure. Unbeknownst to Kardashian at that moment, her Instagram update violated the regulations against promoting financial products outlined in the federal securities laws, leading to a significant fine and inquiry by the Securities and Exchange Commission.
In response to the situation, SEC Chair Gary Gensler remarked, “This incident serves as a cautionary tale that when celebrities or influencers endorse investment opportunities, including crypto asset securities, it does not signify that those investment products are suitable for every investor.” He further added, “We urge investors to carefully evaluate the potential risks and rewards of an investment considering their individual financial objectives.”
Kardashian has consented to pay a penalty of $1.26 million to the SEC, encompassing compensatory damages from the civil lawsuit, along with the remuneration she acquired for the promotional activity plus accrued interest. Furthermore, she has entered into a formal agreement refraining from publicly endorsing digital assets for a minimum period of three years.
Kim Kardashian agreed to pay a $1.26 million fine to the Securities and Exchange Commission to settle civil charges after the reality TV star touted a crypto asset, EthereumMax, on Instagram.https://t.co/BxhFaBDRkF
— CNN (@CNN) October 3, 2022
A statement from Kardashian’s legal representatives mentioned, “Ms. Kardashian is content with reaching a resolution with the SEC. She cooperated fully with the SEC from the outset and is committed to aiding the SEC in any way possible. Resolving this matter swiftly was her priority to prevent a prolonged altercation. The arrangement she struck with the SEC enables her to move forward and focus on her diverse business endeavors.”
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