How much has Kim Kardashian paid in penalties to the SEC for Crypto Promo?
The reality TV star was sued for failing to disclose payments received to push EthereumMax on her Instagram page.
Cryptocurrency sponsorships have becoming increasing commonplace in recent years, with prominent companies buying up valuable advertising space everywhere from influencers’ social media accounts to half time of the Super Bowl.
However the murky world of cryptocurrencies can leave stars open to legal charges if they do not play by the rules.
Reality TV superstar Kim Kardashian has agreed to pay $1.26 million for pushing a crypto asset on her Instagram feed without disclosing that she had been paid for the post. Federal regulators accused her of touting EthereumMax to her legion of followers without declaring that she was benefitting financially.
Back in January the Securities and Exchange Commission opened a case against Kardashian on behalf of investors who claimed that they had been misled by the advertisement.
Kardashian, along with other public figures, promoted the product, causing its value to surge by more than 1,300% in the weeks following the posts. However shortly after that the price slumped to an “all-time low,” which the lawsuit alleges was a result of the defendants selling off their own EthereumMax coins “for substantial profit.”
Gary Gensler, chairman of the SEC, said on Monday: “This case is 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.”
Which celebrities have been accused of pushing EthereumMax?
Kardashian’s settlement centres around an Instagram post from June 2021 in which she asked her followers: “ARE YOU INTO CRYPTO??? THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN.”
However despite claiming that she was simply sharing the thoughts of her friends, she was actually paid $250,000 to publish the post. The $1.26 million settlement agreed was a repayment of her original fee (plus $10,000 interest) and a $1 million penalty from the SEC.
Other defendants in the case include boxer Floyd Mayweather Jr and former NBA star Paul Pierce.
In May 2021 EthereumMax was using a match between Mayweather and YouTuber Logan Paul to promote the cryptocurrency, and the former world champion also advocated for the product at a crypto-currency conference.
In that same month Pierce posted about the token on Twitter, which the lawsuit claims was “praising EthereumMax’s ability to make money for him”.
Neither Mayweather nor Pierce have yet come to an agreement with the SEC or the claimants.