Kim Kardashian agreed to pay a $1.3M fine as the SEC cracks down on celeb crypto promos
Keeping up with the crypto… Kim K is used to making headlines, but this one’s gonna cost her. Kardashian has agreed to pay the US Securities and Exchange Commission a $1.3M fine to settle charges related to an Insta post she’d made promoting alt coin EthereumMax (not to be confused with ether). Kim used the #ad hashtag but failed to disclose she was paid $250K to promote the coin to her 330M+ followers — a violation of the Securities Act. The reality star turned billionaire entrepreneur was also barred from promoting crypto for three years. She’s not the first to get SEC attention:
- Bad-vertising: In 2018 Floyd Mayweather and DJ Khaled had to pay hundreds of thousands of dollars for failing to disclose how much they were paid to promote initial coin offerings — the first time the SEC dished out an ICO-related charge.
Crypto’s red carpet… From Matt Damon to LeBron James to Gwyneth Paltrow, celebs have jumped on the crypto bandwagon, with some collecting big checks to promote digi-assets. Regulators are paying more attention to celeb crypto promos now that scams are proliferating: crypto scams have cost people $1B+ since last year, with nearly half of the victims saying they first heard about crypto on social media.
Regulators are marking their territory… Although industry insiders argue that crypto isn't a security, the SEC increasingly appears to disagree — and the US’s top regulators are starting to hold it accountable to the same rules. SEC Chair Gary Gensler tweeted to warn investors against celeb- and influencer-endorsed assets. Kim’s coin-related fine is a splashy indication of regulators marking their ground.