The US Securities and Exchange Commission (SEC) stated that the reality TV star had received $250,000 for promoting the crypto token, without admitting to the fact that she has been financially incentivized to do so.
Kardashian agreed not to market any cryptocurrency digital assets for the next three years.
Kardashian agreed to pay $1.26 million to the SEC, including the interest. Her lawyers told BBC News that the reality TV star is happy that we have reached an agreement with the SEC.
Kardashian invited her 328 million Instagram followers to buy EMAX tokens, a cryptocurrency offered by EthereumMax.
Kardashian posted a link on Instagram to a company’s website inviting people to invest in EMAX tokens. Kardashian shared what her friends had told her about EthereumMax tokens on her Instagram account in June 2021.
She was required by law to report that she has been financially rewarded by the company that she has been promoting. EMAX tokens are directly issued by the EthereumMax company and represent the native digital asset for the crypto firm.
Kardashian has posted about EMAX tokens on her Instagram account without disclosing that she was paid to do so.
Kardashian has received $250,000 by EthereumMax for writing about them on her Instagram account, however she did mention a disclaimer that this was not a financial advice and she did include the word “ad” in her insta story post.
I am not going to share what my friends just told me about the Ethereum Max token. Just what my friends told me about it! Kardashian said she was paid $250,000 to promote a cryptocurrency. She also used the hashtag #ad in her post.
The SEC on Monday said Kardashian failed to report that she was paid $250,000 by EthereumMax, through an intermediary, to publish a post about EMAX tokens, a crypto asset offered by EthereumMax.
Kardashian failed to reveal that she was being paid $250,000 to promote EMAX tokens. That violates the federal securities laws of the United States, the SEC said.
Kardashian paid a total of $260,000 to the SEC for advertising EMAX tokens, including the interest, and that was in addition to the $1 million fine that the commission has charged her for her blatant violation of the laws.
EMAX token prices have fallen 98% since June 2021, which is close to the rate drop of many altcoins that felt sharply after the most recent crypto crash.
SEC Chair Gary Gensler says the settlement with Kim is a reminder to celebrities and others that the law requires them to declare publicly how much they are paid to promote securities investments.
Gensler used the Kardashian’s case to educate the public on the severe repercussions of violating strict laws that are meant to protect the investors. He released a comedy video on YouTube that warned investors about the dangers of relying on wealthy people to give them investment advice.