Kim Kardashian is facing scrutiny over her EthereumMax promotions. Kim has been charged by the Securities and Exchange Commission for promoting a crypto asset security issued and sold by EthereumMax on social media without reporting the compensation she got for the promotion.
In exchange for dropping the accusations, paying $1.26 million in fines, disgorgement, and interest, and cooperating with the Commission’s continuing investigation, Kardashian agreed to settle the case.
Kim Kardashian failed to reveal the promotion
According to the SEC’s decision, Kardashian failed to disclose that she received $250,000 from EthereumMax to write a post regarding EMAX tokens on her Instagram account. Kardashian’s tweet included a link to the EthereumMax website, where prospective investors could find instructions on how to buy EMAX coins.
“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. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
SEC Chair Gary Gensler
According to the SEC’s ruling, Kim Kardashian broke the federal securities laws’ anti-touting clause. Kardashian consented to pay the aforesaid $1.26 million. The amount included about $260,000 in disgorgement (which reflects her promotional money), plus prejudgment interest, along with a $1,000,000 penalty, without admitting or contesting the SEC’s allegations. Kardashian also consented to refrain for three years from endorsing any cryptocurrency-related securities.
Another lawsuit was filed earlier this year against Kim and Floyd Mayweather regarding the EthereumMax promotion. A class-action complaint accusing EthereumMax (particularly the business) and its celebrity boosters of cooperating to fraudulently inflate the price of the EMAX token.
In 2021, reality star Kim Kardashian stirred up controversy with a post on Instagram endorsing the EMAX token. Are you guys into crypto???? she asked in a post. This is just what my buddies recently informed me about the Ethereum Max token, not financial advice. She implied that she was paid to advertise it by including the hashtag #ad in the message.
While competing against YouTube celebrity Logan Paul, boxing great Floyd Mayweather Jr. promoted the token.