The Securities and Exchange Commission (S.E.C.) fined the reality star Kim Kardashian for failing to disclose the payment she received ($250,000) for promoting the EMAX tokens to her 330 million Instagram followers. The S.E.C. mentioned that Kardashian violated one of the federal securities laws.
The S.E.C. chairperson, Gary Gensler, released a statement explaining how Kardashian’s case should set an example to other celebrities to be transparent with the public and disclose paid content with the amount they received.
“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,” he added.
Kardashian’s lawyer, Patrick Gibbs, told BBC News that she wants to fully cooperate with the S.E.C. 's, as she wants to resolve the issue as soon as possible so that she could dedicate her time to other projects.
“She wanted to get this matter behind her to avoid a protracted dispute,” Gibbs added.
Additionally, the KKW Beauty Founder has agreed to abstain from promoting crypto-related content for at least three years. Although Kardashian did not deny the S.E.C. findings yet, she agreed to settle the charges by paying a $1.26 million penalty and to cooperate with the S.E.C. in the ongoing investigation.
Kim Kardashian is definitely not the first to be charged by the S.E.C. for violating the securities act of 1933 for unlawfully promoting crypto currency. Two years ago, other celebrities like Cardi B and Jordin Sparks were fined as well. S.E.C. had also fined Steven Seagal and banned him from promoting investment-related content for three years.
According to a federal prosecutor and the head of asset forfeiture in the New York District Attorney’s office, the S.E.C. Kardashian wants to send a message to other internet personalities and celebrities to be honest about the nature of the content they upload online.
Below is Kardashian’s Instagram story where it was posted on June 13, 2021