American TV reality superstar, Kim Kardashian has been charged by the United States Securities Commission (SEC) for the promotion of EMAX Token, the native coin of the EthereumMax protocol.
As contained in a press release issued by the commission, Kim did not disclose that she was paid the sum of $250,000 for the promotion which she posted on her Instagram handle. As described by the SEC, the posted promotion contained a link that lead visitors to a landing page where instructions on how to buy the token can be obtained.
Kim has neither admitted to nor denied she breached the anti-touting provision of the federal securities laws. However, she has agreed to pay the total sum of $1.26 million, including $260,000 as disgorgement to stand in for the payment she received for the promotions and pre-judgment interest, and a $1 million penalty.
“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.”
The regulator said it is mandatory that celebrities disclose whatever remuneration they were given and that the members of the public deserve to know. Per the sanctions levied on the celebrity, she has also agreed not to promote any crypto asset for the next three years. In addition, she has agreed to co-operate with the investigators as the case is still very much open.
The SEC is known to crack down on celebrities for promoting fraudulent crypto tokens. Back in June 2020, professional boxing legend, Floyd Mayweather was also indicted for the promotion of Centra Tech’s Initial Coin Offering (ICO) back in 2017.
Image source: Shutterstock