TV reality show star Kim Kardashian who is famous for being famous was charged by the Securities and Exchange Commission (SEC) for Crypto currency fraud on Monday.
The SEC charged Kardashian for using social media to personally tout a crypto currency sold by EthereumMax without disclosing to her fans that she was being paid to tout the security. (See the Charges)
Kardashian quickly agreed to settle the charges for a fine of $1.26 million — the same amount that the SEC said she was paid for pushing the crypto on her fans.
Kardashian’s posts about the security contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.
“The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion,” Gurbir Grewal, director of the SEC’s division of enforcement, said in a statement.
“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,” said SEC Chair Gary Gensler.
“We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
“Ms. Kardashian’s case also serves as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities,” Gensler added.