Kim Kardashian, a reality TV star and entrepreneur in the beauty industry, consented to pay more than $1 million to resolve the SEC’s complaints. This was due to the fact that she omitted information about a payment she received for endorsing EthereumMax’s crypto on Instagram. She also consented to stop promoting cryptos for three years.
“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,” Gary Gensler, chairman of the SEC, according to CNBC.
He added that this case serves as a helpful reminder that people, including celebrities, are required by law to disclose when and how much they were compensated for endorsing the purchase of securities. The SEC claimed that Kim, who is reportedly worth $1.8 billion, obtained $250,000 for cryptocurrency advertising without disclosing it in this case.
Kim is pleased that the issue with the SEC has been resolved, according to her attorney. She has always cooperated fully with the SEC and is prepared to do whatever she can to help them with this situation. In order to prevent a drawn-out claim, Kim wanted to put this situation behind her. As a result of Kim’s agreement with the SEC, she is able to move forward with her many different business pursuits, BBC reported.
The SEC may have targeted the reality TV star as a way to send a message to other influencers who might be promoting cryptocurrency or other investment assets, according to Charles Whitehead, a professor at Cornell Law School, who was quoted by CNN.
It serves as a warning to them that they should reconsider dealing with cryptocurrency. Kim is also being used as a model by the SEC to increase compliance with securities laws, which is a clever strategy to draw attention to the issue and deter others from doing it.
Kim isn’t the first famous person to receive an SEC fine for promoting cryptocurrency, either. Boxer Floyd Mayweather Jr. and musician DJ Khaled each paid fines for promoting crypto in 2018. Mayweather, who received a $300,000 salary, was fined a little over $600,000. Khaled, who received $50,000, was hit with a $150,000 fine. In 2020, actor Steven Seagal received a fine of over $300,000 for engaging in the same thing.