- Kim Kardashian was fined $1.26 million for promoting crypto on instagram.
- The businesswoman has neither denied nor admitted the charges.
The latest whiplash from the American watchdog
The Securities and Exchange Commission (SEC) charged Kim Kardashian with illegally selling ‘crypto asset security.’ The official press release of the financial watchdog claimed that Kardashian ‘failed to disclose’ that she was paid $250,000 to publish EMAX, the token offered by EthereumMax.
EthereumMax (EMAX) should not be confused with Ethereum (ETH). The latter is the second largest cryptocurrency by market capitalization. EMAX is a cryptocurrency traded on the Ethereum blockchain, though.
In June 2021, Kim Kardashian promoted EMAX in an Instagram story. It is notable to mention that Kardashian had around 225 million followers at the time she promoted the asset. Today, she has 331 million followers.
According to the SEC, Kardashian has neither admitted to or denied the unlawful act; however, she has agreed to pay the penalty. The $1.26 million fine includes a $260,000 ‘disgorgement which represents her promotional payment’ plus a $1000,000 penalty.
SEC top officials: the case is a reminder that no one is above the law
Gary Gensler, Chairman of the SEC stated in the release that Kardashian’s case serves as a reminder that promotion of ‘investment opportunities’ by celebrities does not imply that the security is ‘good for all investors.’
“We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.” He mentioned that the case reminds that everyone including celebrities are required to disclose how much they are paid for promotions.
Director of SEC’s Enforcement Division Gurbir S Grewal clarified that “Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”
The EMAX token
The token price plummeted 97% since Kardashian’s post last year. In February this year, the token was shifted from Ethereum to Arbitrum. Arbitrum is a cheaper blockchain solution. Nansen data suggests that approximately 31% of the tokens are now circulating on Arbitrum.
At the time of writing, EMAX price according to coinmarketcap.com was $0.000000008446 (2:00 am, ET)
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