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Kim Kardashian agreed to pay the Securities and Exchange Commission a $1.26 million fine to settle civil charges after promoting a crypto asset called EthereumMax on Instagram.
The SEC said that Kardashian didn’t say that she was paid $250,000 to post on Instagram. She also agreed to help the SEC with its ongoing investigation and pay the fine.
“This case is a reminder that just because a celebrity or influential person backs an investment opportunity, including crypto-asset securities, that doesn’t mean it’s right for all investors,” said Gary Gensler, the head of the SEC. “We advise investors to think about the risks and opportunities of an investment in light of their own financial goals.”
Kardashian also agreed that for the next three years, she would not promote any crypto securities.
In a statement, her lawyers said, “Ms. Kardashian is glad to have worked this out with the SEC.” Kardashian has been completely honest with the SEC from the start, and she is still willing to do anything she can to help the SEC with this case.
She wanted to settle this matter quickly so that it wouldn’t drag on for a long time. The deal she made with the SEC lets her do that, so she can move forward with her many business plans.
The SEC said that Kardashian broke a federal law that says you can’t promote a company. Kardashian agreed to the order without agreeing or disagreeing with what the SEC had found. As part of the settlement, she has to pay a $1 million fine and give back the $250,000 she got, plus interest.
Gensler wrote on Twitter that “any celebrity or influential person’s goals might not be the same as yours.” He said that people who want to invest shouldn’t think that the skills of celebrities are the same as the skills needed to give good investment advice.
In an Instagram post from June 13, 2021, Kardashian asked, “Are you guys into crypto?” This is not financial advice, but what my friends told me about the Ethereum Max Token. She used different hashtags, such as #ad, #emax, #disrupthistory, and others.
The SEC said that at the time of the post, she had 225 million people following her on Instagram. In an interview on CNBC on Monday, Gensler said that the ad doesn’t do enough to follow SEC rules when it comes to promoting investments.
“If you want to advertise perfume, vacation homes, or anything else on the internet, there are different laws about that.” But these are the laws about security, “he replied.
Forbes says that Kardashian’s net worth is about $1.8 billion. So, a $1.26 million fine is the same as a fine of less than $100 for the average US family, which, according to the Federal Reserve’s most recent estimate, has a net worth of about $122,000.
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