Kim Kardashian In Trouble For Crypto Promotion

Written by Ciryan Achola on October 3, 2022

At a time when Influencer Brand Promotions are at an all-time high, Kim Kardashian didn’t think she would get fined when she took on a promotional deal by EthereumMax.

In a press statement issued today, The U.S Securities and Exchange Commission has announced that Kim will pay $1.26 million in penalties, disgorgement, and interest. Her crime? Failing to declare the payment she received for the promotion.

According to the SEC, Kim Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens, a crypto asset security offered by EthereumMax. The post had a link directing Kim’s 331 Million Instagram Followers to the EthereumMax website with instructions on how to invest.

The SEC’s investigations have revealed that Kardashian violated the anti-touting provision of the federal securities laws.

The SEC is clear on the fact that endorsements on social media by celebrities may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement.

“Investors should note that celebrity endorsements may appear unbiased, but instead may be part of a paid promotion. Investment decisions should not be based solely on an endorsement by a promoter or other individual.” Reads a 2017 brief from the SEC.

The commission also advises potential investors to do their due diligence and not only rely on influencer promotions when making important investment decisions saying, “Celebrities who endorse an investment often do not have sufficient expertise to ensure that the investment is appropriate and in compliance with federal securities laws.”