Kim Kardashian's $1.26 million sponcon fine should put a halt to dubious cryptocurrency advertising.

 

Kim K is accustomed to receiving payment for posting on Instagram. The cost is now being borne by her.Kim Kardashian, a reality TV star, was fined $1.26 million by the U.S. Securities and Exchange Commission (SEC) for promoting cryptocurrency securities on Instagram without declaring her affiliation with the company and the compensation she received.

 

According to a press release from the SEC on Monday morning, Kardashian received $250,000 in exchange for promoting the EMAX tokens, a cryptocurrency asset security offered by EthereumMax. The SEC claims that Kardashian received payment from EthereumMax through an unnamed middleman. The SEC has accused her of promoting cryptocurrencies without disclosing to her followers that she was being paid to do so, which is illegal.

 

When Kardashian announced her promotion for cryptocurrency in June 2021, she had 225 million Instagram followers.

 SEC chair Gary Gensler said in a statement that was published along with an SEC video on celebrity investment endorsements, "This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn't mean that those investment products are right for all investors." We advise investors to take their personal financial objectives into account when evaluating an investment's possible risks and opportunities.

 

Kardashian consented to shell out the $1.26 million "without acknowledging or rejecting" the SEC's investigation's conclusions. The $1 million penalty, $1 million in disgorgement, and interest are all paid as part of the $1.26 million settlement. Kardashian also consented to refrain from promoting cryptocurrencies for three years. She will also assist in the SEC's ongoing inquiry into the securities issued by EthereumMax for its cryptocurrency assets.

 Celebrities who promoted cryptocurrencies to their followers on social media appear to be finally coming under fire. The SEC's announcement of an ongoing inquiry more than suggests that other celebrities who pushed EMAX tokens would also face fines. For marketing EthereumMax's cryptocurrency securities, a class action lawsuit has been filed against Kardashian, Floyd Mayweather, and Paul Pierce.