Business mogul Kim Kardashian has been faced with a £1.12m ($1.26m) fine for advertising EthereumMax on her Instagram page without informing fans that it was an ad.
The 41-year-old influencer also failed to disclose the fact that she was paid £220,000 ($250,000) for promoting the cryptocurrency asset on her social media feed, according to the Securities and Exchange Commission.
She has now agreed that she will not promote crypto asset securities for three years.
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Talking to BBC News, her lawyer said: “Ms Kardashian is pleased to have resolved this matter with the SEC.
“Kardashian fully cooperated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter.
(Image: Getty Images for FENDI)
“She wanted to get this matter behind her to avoid a protracted dispute.
Since the news of Kim’s fine hit Twitter, fans had quite a lot to say about it.
One social media user wrote: “This was a pump and dump scheme and some people lost their life savings because celebrities know that they can do whatever tf they want, if they steal, they pay a fine if people steal, they go to jail. She is going to be a lawyer?”
Meanwhile another chimed: “That’s like a regular person getting a $1 fine… She has probably spent more on shoes in her lifetime.”
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While a third said: “Wait, there’s people who think celebrities do advertisements for free?”
In June last year, Kardashian took to Instagram and wrote: “ARE YOU INTO CRYPTO??? THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN.”
The post included a link to the EthereumMax website, which provided instructions for those interested to purchase EMAX tokens.
According to US law, people who tout a certain stock or crypto security have to reveal not only that they are getting paid for the advertisement, but also the amount, the source and the nature of those payments, SEC chair Gary Gensler explained.
(Image: kimkardashian/Instagram)
He also said: “Ms Kardashian’s case also serves 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.
However the Keeping up with Kardashians star isn’t the only celebrity to receive a hefty fine by the SEC over promotions on crypto.
In 2018, professional boxer Floyd Mayweather Jr and music producer DJ Khaled were both charged for allegedly not disclosing payments they received for the promotion of crypto coins.
(Image: getty)
However, neither Mayweather nor DJ Khaled admitted or denied the charges that they faced but they both agreed to pay a combined $767,500 (£682,700) in fines and penalties.
In January, Ms Kardashian, Mayweather Jr, basketball player Paul Pierce and EthereumMax’s creators were sued by investors.
The legal action made against them alleged that they had collaborated to “misleadingly promote and sell” the cryptocurrency in a “pump and dump” scheme which was created to inflate the price before selling to investors.
However EthereumMax disputed the allegations at the time they were made.
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Source: Celebrities - dailystar.co.uk
