American celebrity Kim Kardashian has agreed to pay the U.S. Securities and Exchange Commission (SEC) $1.26 million in settlement of allegations that she facilitated the sale of the unregistered security token EMAX.
According to the SEC, Kardashian $250,000 was paid by EthereumMAX to promote EMAX tokens to her Instagram followers (currently over 330 million).
Securities laws require celebrities who promote crypto assets to disclose amounts received for the promotion.
“Investors have a right to know if security publicity is unbiased, and Kardashian did not disclose this information,” said SEC Commissioner Gurbir Grewal.
As a result, the SEC asked Kardashian to repay the $260,000 she received for her promotion, plus an additional $1 million for violating securities laws.
Kardashian agreed to pay $1.26 million and will refrain from selling cryptocurrency tokens for the next three years.
SEC Chairman Gary Gensler has advised investors not to base their investment decisions solely on influencer promotions.
“When celebrities and influencers endorse investment opportunities involving cryptocurrency securities, this incident serves as a reminder that those investment products may not be suitable for all investors.”
Gensler added:
“MS. The Kardashian lawsuit is also a reminder to celebrities and others that the law requires them to disclose when and how much they get paid to encourage their investment in securities. I have.”
The SEC has an ongoing lawsuit against another influencer, Ian Balina, who allegedly promoted an unregistered SPRK securities token to his social media followers in 2018.
