Kim Kardashian has made headlines again. And this time, it’s for a massive fine she has to pay the Securities and Exchange Commission, as per CNN Business. This probe into Kardashian started when she promoted EthereumMax. This was done on her official Instagram account, which has over 330 million followers.
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In addition to paying a whopping $1.26 million fine, she fully cooperated with the SEC from the very beginning as the investigations took place, according to the BBC.
Why was she charged?
When it comes to crypto, there are a lot of rules regarding its advertising and marketing. In this case, Kardashian received a payment of $250,000 for advertising and promoting the cryptocurrency on her Instagram account without disclosing that it was a paid promotion.
Advertising and marketing done by celebrities are the most influential and successful ways to promote crypto, as per Investing.com. Since crypto is a relatively new market, not everyone is fully aware of its rules and regulations. And a portion of it still remains primarily unregulated.
Celebrities must keep in mind that something as delicate and volatile as cryptocurrency may not be suitable for every investor. Not to mention the fact that crypto is often a speculative asset. Hence, mentioning that it is a paid promotion is essential as the law requires one to disclose this. And, further investigation showed that EMAX followed a ‘pump and dump’ format. Wherein the price is inflated highly before sell-offs via influential celebrities.
What is Kim Kardashian’s take?
Kardashian wanted to get ahead of the issue, so she agreed to fully cooperate with the investigation. She also went on to agree not to promote any crypto for three years. Her settlement included $1 million in fine, and she had to give up the $250,000 payment she received and interest.
Sources used:
- BBC: 'Kim Kardashian pays $1.26m over crypto 'pump and dump''
- CNN: 'Kim Kardashian charged by SEC, agrees to pay $1.3 million fine'
- Investing: 'Kim Kardashian Sued for EthereumMax, Pays $1.26M Fine'
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