The Strategist

Kim Kardashian fined $1.26M for advertising cryptocurrency on social networks

10/04/2022 - 04:23

Kim Kardashian has been fined $1.26 million by the SEC for using social media to promote a cryptocurrency without disclosing that she was being paid to do so.

Kim Kardashian, a celebrity TV actress and businesswoman, was fined $1.26 million by the U.S. Securities and Exchange Commission (SEC) in 2021 for using Instagram to promote the cryptocurrency EthereumMax (EMAX), which is held by Meta.

The SEC claims that Kim Kardashian promoted the soon-to-depreciate cryptocurrency EthereumMax in a post she made on her page in 2021.

The EthereumMax creators paid her $250,000 for the promotion, which she did not disclose. She supplemented the article with the hashtag #AD, which stands for "Advertisement."

According to Bloomberg, the U.S. Securities and Exchange Commission has previously issued numerous warnings urging celebrities endorsing cryptocurrencies to disclose to prospective investors if they are compensated for advertising.

The SEC chairman Gary Gensler commented, "This case is a reminder that celebrity or influencer endorsements of any investment opportunity, including crypto-asset securities, do not mean they are suitable for all investors."