The Securities and Exchange Commission (SEC), on 3 October, charged American model and socialite Kim Kardashian for touting a crypto asset security on social media. The TV personality also failed to disclose that she received a payment for the promotion of the same. The SEC claimed that Kardashian was paid $250,000 to promote EMAX tokens […]
American model and socialite Kim Kardashian for touting a crypto asset security on social media. The TV personality also failed to disclose that she received a payment for the promotion of the same.that Kardashian was paid $250,000 to promote EMAX tokens on Instagram that are sold by EthereumMax. Kardashian agreed to pay penalties, disgorgement, and interest worth $1.26 million and cooperate with the Commission’s ongoing investigation.
“The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. This isn’t the first time that the SEC has cautioned individuals about trusting celebrities or influencers endorsing potentially unlawful assets. In November 2017, the SECinvestors about possible unlawful endorsements of Initial Coin Offerings . It had also cautioned that celebrities might not be well informed about the assets being endorsed.
Furthermore, the SEC had imposed penalties on professional boxer Floyd Mayweather and musician DJ Khaled in 2018. The above-mentioned public personalities also failed to disclose the compensation received for promoting ICOs.SEC Chair Gary Gensler stated that the case serves as a reminder for celebrities. This is because they are obliged by law to provide public disclosure if they are being paid to promote an investment in securities.
Additionally, they are also obliged to disclose the nature, source, and amount of compensation offered by the company for promotional activities on social media.Subscribe to get it daily in your inbox.
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