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October 3, 2022

Kim Kardashian To Pay $1M To SEC Over Crypto Fraud

On Monday, the Securities and Exchange Commission announced that Kim Kardashian, an American reality TV star and social media influencer, had settled charges that she had improperly promoted a crypto token on social media without disclosing the amount of compensation she had received for doing so. The settlement amounts to $1.26 million.

She is facing charges for allegedly advertising a crypto asset security, as defined by the government. The reality TV celebrity and influencer in question has been pushing the EthereumMax (EMAX) coin since last year. Also, for the next three years, Kardashian has promised not to promote any stocks based on cryptocurrency.

Player boxer Floyd Mayweather Jr., who notably wore a T-shirt with the EMAX logo on the stage at a Bitcoin maximalist conference in Miami in June 2021, and former NBA star Paul Pierce were both engaged in the marketing of EMAX, an Ethereum-based currency that garnered headlines last summer.

Gurbir Grewal, head of the SEC’s division of enforcement, said in a prepared statement that the federal securities laws make it crystal clear. That any celebrity or other anyone who promotes a crypto asset security is required to declare the kind, source. And also the amount of money they received in return for the promotion.

The attorney for Kim Kardashian has expressed her happiness at the matter’s resolution with the SEC. She noted that her client has been cooperative with the SEC from the start. And is still ready to help in any way she can.

Gary Gensler Chimes In

In a press statement announcing the accusations, the Chair of the SEC, Gary Gensler, said that the law compels celebrities to disclose to the public when and how much they are paid to encourage investment in securities. This was stated in the context of the announcement of the allegations.

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According to the SEC, Kardashian did not declare that she had been paid $250k to promote the coin. Even though she was required to do so. According to the news release issued by the SEC, the settlement included an agreement from Kardashian that she would refrain from promoting anything having to do with crypto for the next three years. Despite the fact that Kardashian did not admit to any misconduct, she did admit that she would not do so.

Gary Gensler, the chair of the Securities and Exchange Commission, said in a statement that this case serves as a reminder that just because a celeb or other influential person endorses a particular investment opportunity. Such as a crypto asset security. It does not necessarily mean that the investment product in question is right for all investors.

He noted that they advise investors to assess an investment’s possible risks. And possibilities in light of the clients’ personal financial objectives.

A cryptocurrency token is a tradable asset that is constructed on top of already developed cryptocurrency technology. EthereumMax is a kind of cryptocurrency token.

It was one of the numerous tokens that generated questions from skeptics due to the amount of advertising that it was receiving online. And it was because of this promotion that critics began to question its legitimacy.