Kim Kardashian Fined For Undisclosed Paid Promotion Of Cryptocurrency
In a strange turn of events in the cryptocurrency industry, Kim Kardashian has been officially sued by the Securities and Exchange Commission (SEC) for promoting EthereumMax without disclosing that it was an advertisement.
The fine she incurred was a whopping US$1.26 million, an amount drawn from not disclosing that she was initially paid US$250,000 for advertising for the market. The total includes a US$1 million penalty and a US$260,000 disgorgement to represent her promotional payment and prejudgement of interests by profiting from the terms set by EthereumMax.
When presented with the penalty, Kardashian acquiesced to pay it in full without agreeing or denying the claims made against her. In addition, she has promised not to promote any cryptocurrency for the next three years.
In 2017, the SEC warned that celebrities who do not state they are being paid to advertise for a brand could be considered unlawful.
Kardashian had previously posted on her Instagram stories in 2021 touting that a friend had directed her to EthereumMax and that she had profited from investing in it. The SEC had warned people of the issue of following along with a post from a celebrity claiming they had made money off of investing in cryptocurrency.
Kardashian has a reach of 200 million followers on Instagram, many of whom are impressionable young fans. While she might make a quick buck from the post, her directing them to invest could cause many people to lose money, especially as the cryptocurrency winter rages on.
In fact, she did manage to convince a considerable number of people at that time. According to Ars Technica, one in five adults had seen her post. In addition, a poll showed that 19% of people had invested in the company.
Unfortunately, Kardashian was just one of many celebrities at the time that engaged in promotion for different cryptocurrency offers.
[via Ars Technica and BBC, cover image via Photo 188928358 © Hutchinsphoto | Dreamstime.com]
