Kim Kardashian has been given a $1.26m charge by the SEC for promoting a crypto asset without disclosing the pay-out she received for it.
According to Finextra, Kardashian failed to disclose the $250,000 payment that she received for the promotion.
The SEC’s order found that Kardashian failed to disclose that she was paid the cash sum when she published a post on her Instagram account about Emax tokens, which is a crypto asset security being offered by EthereumMax.
Kardashian’s post included a link to the EthereumMax website, which offered instructions for potential investors to purchase the tokens.
The settlement reached with the SEC by Kardashian involves a $260,000 payment that represents that original amount, plus interest, as well as $1 million in penalties. Kardashian has said she agrees to cooperate with an ‘ongoing investigation’ by the Commission.
Gary Gensler – SEC chair – immediately took to Twitter to warn investors not to make investment decisions based only on the recommendations of a celebrity or influencer.
SEC division of enforcement director Gurbir Grewal said, “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 a security is unbiased, and Ms. Kardashian failed to disclose this information.”
The SEC recently slapped Barclays and Barclays Bank with a total fine of $361m for controls failures.
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