SEC Charges Social Media Influencer for Cryptocurrency Promotion
The U.S. Securities and Exchange Commission (SEC) filed charges against an American celebrity and social media influencer for promoting a cryptocurrency investment without disclosing that she was being paid to do so.
Kim Kardashian's involvement in the promotion of the EthereumMax cryptocurrency scheme has landed her in hot water, with the socialite agreeing to pay $1.26 million in penalties. This is a major setback for Kim, who has built her brand and reputation on her social media savvy and ability to generate buzz.
The United States Securities and Exchange Commission has announced charges against Kardashian for promoting a crypto asset security without disclosing the payment she received for her involvement. This is a serious issue and could have major implications for her career.
Kardashian has agreed to settle the charges and pay $1.26 million in penalties, disgorgement and interest. This is a victory for the SEC and a step in the right direction for protecting investors.
I think that it is unfortunate that Ms. Kardashian did not disclose the payment she received to promote the EMAX tokens. I believe that had she done so, it would have been a more honest and transparent way to engage with her followers. I hope that in the future she will be more mindful of disclosing any payments she receives for endorsements.
The SEC's order finding that Kardashian violated the anti-touting provision of federal securities laws is yet another example of the agency's crackdown on cryptocurrency-related securities violations. This has been a growing trend with the SEC in recent years, and it shows no signs of abating.
Kardashian has neither admitted nor denied the SEC's findings but has agreed to settle the charges. This was broken down into $260,000 in disgorgement as well as a $1 million penalty. Kardashian has also agreed to not promote any cryptocurrency assets until 2025. This is a positive development for those who are concerned about celebrities endorsing digital assets. It shows that the SEC is willing to take action against those who violate securities laws and that they are willing to hold celebrities accountable.
Today @SECGov, we charged Kim Kardashian for unlawfully touting a crypto security.
— Gary Gensler (@GaryGensler) October 3, 2022
This case is a reminder that, when celebrities / influencers endorse investment opps, including crypto asset securities, it doesn’t mean those investment products are right for all investors.
The SEC's Gary Gensler is urging the public to be cautious when investing in cryptocurrency assets, and is reminding celebrities and influencers of their obligation to disclose any payments they receive for promoting securities.
"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."
Kardashian's legal team has filed a motion to set aside a class-action complaint aimed at the businesswoman and other American celebrities. The complaint, filed in January 2022, alleges that Kardashian and other influencers misled investors through the social media promotion of EthereumMax. Kardashian's team argues that the complaint is without merit and that the influencers did not engage in any wrongdoing. They are asking the court to set aside the complaint and dismiss the case. If the motion is granted, it would be a victory for Kardashian and other celebrities who have been accused of misleading investors through social media promotions. It would also send a message to would-be plaintiffs that such cases are difficult to win.
Kardashian's involvement in the lawsuit against the Ethereum-based token project is a positive development, as it will help to increase public scrutiny of the project and potentially lead to greater regulation. This will ultimately protect investors and ensure that the project is run in a fair and transparent manner.
As a news article, I would discuss the recent promotion by Kim Kardashian and other influencers for the EthereumMax token. I would explain how the token surged in value after the promotion, but then dropped significantly afterward. This left many fans out of pocket. I would also interview some of the fans to get their reaction to the situation.
It is disappointing to see that some people in the cryptocurrency industry are willing to mislead others in order to make a quick profit. This latest court filing is a prime example of that. Thankfully, it appears that justice will be served in this case.
