Kim Kardashian agreed to pay a huge fine to the Securities and Exchange Commission after being found guilty of promoting a crypto asset.
After posting crypto called EthereumMax on Instagram, the reality star was charged by the top US financial regulator for failing to disclose the amount she was paid.
Reliable sources say Kim Kardashian had accepted about $250,000 to promote EthereumMax, a crypto that is part of the EMAX tokens.
From what the SEC had to say, Kim Kardashian's post on Instagram "provides instructions for potential investors to purchase EMAX tokens." According to them, the Instagram post violates an "anti-touting provision" in the federal securities law.
Kim Kardashian has neither accepted what the SEC is saying nor has she denied the allegations and findings. It has been reported that the superstar is quite cooperative and has decided to carry out SEC directives.
The former partner of Kanye West also agreed not to promote security tokens and any other cryptocurrency for three years.
According to what the SEC chairperson said, the financial regulator wasn't ready to leave out celebrities from facing the law whenever they broke such rules.
"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," SEC chair Gary Gensler said.
Gensler also advised investors to conduct their own research and consult financial experts before investing in security tokens or other assets.
More Details About the Instagram Post
SEC revealed that Kim Kardashian made the Instagram post on June 13th, 2021.
Kim Kardashian had written, "are you guys into crypto? This is not financial advice but sharing what my friends told me about the Ethereum Max token!" She also inserted different hashtags on the post, including #ad, #emax, and others.
SEC also said that when she made that post in 2021, the reality star had about 225 million followers when she made the post.
While addressing the question of #ad appearing on the Instagram post, Gensler said that the hashtag wasn't enough to comply with SEC laws.
The attorneys representing Kim Kardashian said that the Superstar was eager to resolve the case with the SEC as soon as possible.
"Kim 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. She wanted to get this matter behind her to avoid a protracted dispute," Kim Kardashian's attorney said.
Similar Cases With Other Celebrities
Kim isn't the only celebrity that has failed to acknowledge the SEC laws regarding security tokens and other assets.
Other celebrities, such as Larry Dave and actor Matt Damon have also promoted similar security tokens.
Despite the $1.3 million Kim Kardashian has to pay, it may just be a small amount of money as she is said to have a net worth of $1. 8 billion.