This time, the attention of the Securities and Exchange Commission is set on media personality and fashion model Kim Kardashian.
The basis for this new lawsuit was the payment the “Keeping Up With The Kardashians†star received for posting promotional content about EthereumMax.
In an Instagram post on June 13, 2021, Kardashian wrote, “Are you guys into crypto? This isn’t financial advice but I’m sharing what my friends told me about the EthereumMax token!â€
According to the details from the court case, Kardashian received $250,000 in payment for posting this content and failed to disclose details about her receipt of said amount.
Reasons for the Lawsuit
For context, Kim Kardashian is one of the most followed personalities on social media, with about 331 million followers on Instagram and 74 million on Twitter.
As a reason for the lawsuit, SEC chairperson Gary Gensler stated in a tweet, that when influencers or celebrities endorse or promote certain products (including crypto assets and securities), it doesn’t necessarily mean that these products are suitable for all investors.
Earlier this year, EthereumMax (with no correlation to Ethereum) was also promoted by Floyd Mayweather, a professional boxer.
Soon after, both Mayweather and Kardashian were sued by EthereumMax investors. According to the lawsuit, both celebrities were “paid to hype the cryptocurrency to their fans†in a “crypto bubble and delusion of quick riches,†causing investors to purchase these coins at inflated prices and lose money.
The Aftermath
So far, Kim Kardashian has agreed to pay a total of $1.26 million in fines to the SEC to settle civil charges and to forfeit the $250,000 she was supposed to receive (plus interest).
In addition to paying the fine, Kardashian has agreed to cooperate with the SEC in the ongoing investigation. She has also agreed not to promote cryptocurrency-related products or securities for three years.
Gary Gensler, the chairperson of the SEC, has also encouraged investors to consider the potential risks of their investments, despite their own financial goals.
Before serving up the lawsuit, the SEC found out that Ms. Kim Kardashian had violated the anti-touting provision of the Federal Securities laws. Kardashian neither denied nor admitted these charges.
According to Ms. Kardashian’s attorneys, their client, Kim Kardashian, has cooperated fully with the SEC from the beginning and is pleased to have resolved things with the commission.
This lawsuit, however, is unlikely to faze the reality-show superstar.
According to Forbes, her net worth is reportedly about $1.8 billion, and paying this fine is equivalent to paying less than $100 for the average US family with a net worth of about $130,000.
Disclaimer: The author’s comments and recommendations are solely for educational and informative purposes. They do not represent any financial or investment advice. Always DYOR (do your own research)
