Kim Kardashian Pays $1.26 Million to SEC to Drop EthereumMax Fee
The United States SEC charged the American celebrity and influencer with promoting a value of cryptocurrency assets without disclosing the payments received from his followers.
American socialite Kim Kardashian will pay $1.26 million in fines for her involvement in promoting a cryptocurrency scheme called EthereumMax (EMAX).
The United States Securities and Exchange Commission (SEC) announced the charges against Kardashian on Oct. 3 for “promoting on social media a security as a crypto asset offered and sold by EthereumMax” without disclosing the payment received for her promotional involvement.
Kardashian has agreed to settle the charges and pay $1.26 million in penalties, repayment and interest and is willing to cooperate with further SEC investigations into the EthereumMax project.
The announcement noted that Kardashian failed to disclose a $250,000 payment she had received to post an ad on her Instagram profile promoting EMAX tokens with a link to the project’s website.
The SEC order finds that Kardashian violated the anti-promotion provision of the federal securities laws. This has been the case for other prominent cryptocurrency securities violations involving the SEC in the recent past.
Kardashian did not admit or deny the SEC’s findings, but she agreed to negotiate and settle the charges. This was broken down into $260,000 in return, as well as a $1 million fine. Kardashian also agreed not to promote any cryptocurrency assets until 2025.
SEC Chairman Gary Gensler also used the order to advise the general public to do their due diligence when investing in cryptocurrency assets, while also reminding celebrities and influencers of their obligation to disclose payments related to cryptocurrencies. stock advertising promotions.
“This case is a reminder that when celebrities or influencers endorse investment opportunities, including crypto asset securities, it does not mean that those investment products are suitable for all investors. We encourage investors to consider the potential risks and opportunities of an investment in light of your own financial goals.
Kardashian’s legal team also filed a motion to vacate a class action lawsuit targeting the businesswoman and other American celebrities in August 2022. Kardashian and a handful of other prominent American social media influencers were awarded a class action lawsuit in January 2022 for being involved in deceiving investors through the social media promotion of EthereumMax.
Kardashian posted Instagram stories promoting the project in June 2021, with boxing great Floyd Mayweather also involved in the lawsuit after promoting the Ethereum-based token in the build-up to a celebrity boxing match. There is also YouTuber Logan Paul during that same period.
Fans could buy paid tickets to the event with the token, which increased after the promotion by Kardashian and other influencers. The value of EthereumMax dropped significantly afterward, leaving many penniless.
The original court filing involving Kardashian, Mayweather, and eight others claimed that company executives had collaborated with celebrity endorsements, likewise made misleading statements about the token and their control of most of the tokens. Steve Gentile and Giovanni Perone were listed as co-founders of the project.
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