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CNN Business: Kim Kardashian of New York City accepts to pay $1.3 million after getting charged by SEC. Kim Kardashian agreed to settle civil charges as she promoted the cryptocurrency, EthereumMax on Instagram. Kardashian received $250,000 to publish her Instagram post. Whereas, Kim agreed to pay the fine and cooperate with SEC’s ongoing investigation.
According to SEC Chairperson Gary Genselor, celebrities or influencers endorse investment opportunities, but it doesn’t mean that those investment products are right for the investors. SEC encourages investors to consider an investment’s potential risks and opportunities in light of their own financial goals. After being charged, Kardashian agreed not to promote any crypto securities for up to 3 years. During the case, her attorney said that “Ms. Kardashian is pleased to have resolved this matter with the SEC”.
Kardashian’s Cooperation with SEC
Kardashian cooperates with SEC and is willing to do whatever she can. She wanted to get this matter behind her to avoid a protracted dispute. The agreement stated that SEC allows her to do that so that she can move forward with her many different business pursuits. Whereas, Kardashian broke the anti-touting provision of federal securities law. Kardashian accepted the order without denying or admitting the SEC’s findings. The settlement between Kardashian and SEC includes a $1 million fine and a forfeit of $250,000 she received.
Charles Whitehead, professor at Cornell Law School said that” SEC targeted Kardashian to send message to other influencers who are promoting cryptocurrency or other investment assets”.
He called it a “shot across the bow” for celebrity crypto endorsers.
“It is a signal for those celebrities who are planning to deal with crypto, it’s a time for you to think twice”.”The SEC is also using her as an influencer — but to boost compliance with securities laws. It’s a smart way to bring attention to the matter so others won’t do it”.
Whereas, earlier in the past in 2018, boxer Floyd Mayweather Jr. and music producer DJ Khaled each paid fines for pushing cryptos. A $300,000 payout was received by Mayweather and he paid a little over $600,000 in fines. Whereas, Khaled received a $50,000 payout and was subjected to a fine of more than $150,000.
On June 13, 2021, Kardashian wrote on her Instagram post “Are you guys into crypto”?.Kardashian did not give any financial advice in this statement but was sharing her views about the EthereumMax token. She added different hashtags# including #ad, #ethereummax, and #disrupthistory. Kardashian had 225 million followers on Instagram when the post was published.
In an interview with CNBC on Monday, Gensler stated that “the advertisement is insufficient to adhere to SEC laws regarding the promotion of investments”. Gensler added that”If you’re advertising perfume, or you’re advertising vacation homes or anything else on the internet. There are various laws related to that, but these are the securities laws”.
According to Forbes, Kardashian’s net worth is $1.8 billion. Therefore, a $1.26 million fine is approximately equal to a fine of less than $100 for a typical US family, according to the report presented by Federal Reserves.
Read more: Russian Officials Approved the Use of Cryptocurrency for Cross-border Payments
