Kim Kardashian, American Model and Entrepreneur, was recently charged by the US Securities and Exchange Commission for not disclosing and unlawfully touting cryptocurrency security on her Instagram. The model settled the charges by paying $1.26M to SEC, CNBC reports.
In the United States, models, celebrities, and influencers are liable to disclose payments for promotional content about products and investing to their followers, including crypto asset securities.
However, Kim Kardashian failed to share the details of the payment exchange that was done between her and EthereumMax last year, SEC reported, which resulted in her paying a high price for violating the laws.
The Instagram post read, “ARE YOU INTO CRYPTO??? THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN.”
Having over 331 million followers on Instagram, EthereumMax paid her $250,000 for the promo with a hashtag #ad and the link to EthereumMax’s website.
Following the SEC charge, she has to pay $260,000, the payment she got from EthereumMax, the interest, along with the $1 million fine,
Kim readily settled the SEC charges, her lawyer shared in an official statement. Since she is a businesswoman with much demand in every industry, this settlement has prevented further complications and ended with a $1.26M fine.
“She wanted to get this matter behind her to avoid a protracted dispute. The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits,” the lawyer said.
SEC applies 3-year ban on Kim for promoting crypto assets
In the official statement, the US regulators also shared that Kim has settled for not promoting crypto assets securities for 3 years. This means no one will be able to endorse Kim to promote their cryptocurrency projects on her social media platform.
Although this might be a huge loss for the crypto firms who want promo, Kim sees it as a business setback that won’t affect her other business pursuits.