Kim Kardashian settles with SEC over cryptocurrency ad

Kim Kardashian pays $1.26 million in penalties to the Securities and Exchange Commission after dumping cryptocurrency on social media without disclosing what she was compensated for promoting it. She has also vowed not to promote any form of cryptocurrency for the next three years.

The SEC confirmed in a press release Monday that the mega-influencer agreed to settle the charges and cooperate with the ongoing investigation after failing to tell her millions of social media followers that she paid $250,000 for an Instagram mail promoting EthereumMax tokens. In the post’s caption, the reality TV star shared a link to the EMax website, which has instructions on how to invest in the tokens.

“This case is a reminder that when celebrities or influencers endorse investment opportunities, including crypto-asset securities, that doesn’t mean those investment products are appropriate for all investors,” SEC Chairman Gary Gensler said in a statement .

“We encourage investors to weigh the potential risks and rewards of an investment against the backdrop of their own financial goals.”

Gensler added that the Kardashian case “also serves as a reminder to celebrities and others that they are legally required to disclose to the public when and how much they are being paid to encourage investing in securities.”

In the statement, provided to the Los Angeles Times on Monday, an attorney for Kardashian said she was “pleased to have resolved this matter with the SEC.”

“Kardashian has cooperated fully with the SEC from the outset and remains ready to do everything in her power to assist the SEC on this matter,” the statement continued.

“She wanted to get this matter over with to avoid a protracted argument. The agreement she has in place with the SEC allows her to do this so she can advance her many different businesses.”

The SEC investigation found that Kardashian’s Instagram post violated the anti-advertising provision of the federal securities laws. Though she neither confirms nor denies the SEC’s conclusion, Kardashian has willingly agreed to pay the $1.26 million fine — which covers the money she was paid for the promotion, plus pre-judgment interest and a $1 million fine.

In addition to publicly punishing Kardashian, the SEC on Monday released a video discouraging investors from taking financial advice from celebrities and influencers at face value.

After he became famous thanks to the hit E! series Keeping Up With the Kardashians, the 41-year-old celebrity is known for capitalizing on her immense fame through brand deals and personal ventures. Her lucrative beauty empire includes a shapewear line called Skims and a skincare collection called SKKN By Kim. She currently stars alongside her celebrity family members on the popular Hulu show The Kardashians.

Crypto has also been in the spotlight lately as investors watched prices plummet and businesses plummet, with wealth and jobs disappearing overnight. Some firms have been accused by federal authorities of operating an illegal securities exchange.

The currency is currently at the center of a bipartisan bill introduced by Sens. Debbie Stabenow (D-Mich.) and John Boozman (R-Ark.) that would transfer regulators over bitcoin and ether to the Commodities Futures Trading Commission. Previous bills have proposed transferring that authority to the SEC.

“Federal securities laws are clear,” Gurbir S. Grewal, director of the SEC’s Enforcement Division, said in a statement, reiterating that “any celebrity or other person promoting a crypto-asset security, Art , must disclose the source and amount of compensation received in exchange for promotion.”

The Associated Press was used in compiling this report.

https://www.latimes.com/world-nation/story/2022-10-03/kim-kardashian-settles-sec-cryptocurrency-promotion Kim Kardashian settles with SEC over cryptocurrency ad

Sarah Ridley

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