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| Reality TV star and entrepreneur Kim Kardashian has agreed to settle charges brought by the Securities and Exchange Commission and pay $1.26 million because she promoted a crypto-asset security on social media. which EthereumMax offered and sold without disclosing the payment received for the plug. |
Kim Kardashian will pay $1.26 million to settle federal charges that she promoted a cryptocurrency without disclosing that she was paid, the Securities and Exchange Commission said Monday.
The SEC alleged that the celebrity billionaire and reality TV star used his Instagram account — which has a following of 331 million people — to tout EthereumMax's token, EMAX, without disclosing that he $250,000 is being awarded. EMAX is a token built on the popular Ethereum blockchain. It has lost more than 99 percent in value since peaking in May 2021.
"Are you guys into crypto????" According to the SEC order, Kardashian wrote in a June 2021 post. "This is not financial advice but to share what my friends told me about Ethereum Max Token!"
Kardashian gave joins where potential monetary supporters could sort out some way to buy modernized money related structures.
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| Kim kardashian |
And while Kardashian added "#AD" below the post, the SEC said Kardashian should have disclosed that she received compensation as well as the amount paid.
"This case is a reminder that, at whatever point whizzes or forces to be reckoned with help adventure important entryways, including crypto-asset securities, that doesn't mean those theory things are suitable for all monetary supporters. SEC Seat Gary Gensler said in a clarification. "We encourage monetary sponsor to consider potential endeavor risks and entryways thinking about their own money related targets."
The case is the SEC's most immense crypto necessity action ever against a celebrity who uses his platform to promote a fledgling industry. It's the latest example of Gensler's effort to police what he calls the "Wild West" market where startups and crypto boosters hawk lightly regulated investment products.
Gensler has stated that most crypto tokens, including EMAX, are securities that fall under the jurisdiction of the SEC.
Kardashian's attorney Patrick Gibbs, a partner at the Coley law firm, said in a statement that the Kardashians are "pleased to resolve this matter with the SEC." He added that the deal allows it to "move forward with many of its various business acquisitions."
Kardashian has cooperated with the SEC and is "willing to do whatever they can to help the SEC in this," Gibbs said.
Kardashian, 41, was one of the many celebrities who jumped into the crypto market in 2020 and 2021 with trading booming. A crash earlier this year wiped out more than $2 trillion in value.
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| Kim kardashian |
Digital asset exchanges and brokerages have spent hundreds of millions of dollars on celebrity endorsements, stadium naming rights deals and partnerships with iconic brands like Nike and the NBA. The strategy isn't unique — traditional financial institutions and tech platforms also spend heavily on marketing — but the flood of crypto ads has prompted warnings from consumer advocates and investor protection groups.
The SEC has warned consumers about celebrities who post online earlier about investments, including crypto and special purpose acquisition companies, or SPACs — another Covid-era investment. Obsession with In 2018, hip-hop producer DJ Khaled and boxer Floyd Mayweather Jr. settled charges with the regulator to promote investment in initial coin offerings.
EthereumMax attracted several celebrity promoters. Mayweather reportedly wore a t-shirt bearing the token's name to a Bitcoin conference in 2021, as Ethereum was sponsoring a boxing match between Max Mayweather and YouTube star Logan Paul. In May 2021, former NBA star Paul Pierce tweeted that he "made more money with [EthereumMax] in the last month" than he did with ESPN in a year.
The SEC has found no wrongdoing against Mayweather or Pierce. The regulator's investigation is ongoing.
Tyler Gellasch, a former SEC official who now leads the Healthy Markets Association, said the Kardashian settlement is "clearly aimed at curtailing the latest craze for outgoing celebrities —their benefits." for - and advancing computerized resources."
"Obviously the SEC is attempting to make an impression on the virtual entertainment powerhouse local area to slow down these sorts of limited time bargains," he said.
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