Kim Kardashian will get $1.26 million for the Securities and Exchange Commission allegations that she broke United States rules by touting a criptocurrency without disclosing that she was paid for the promotion.
The SEC said Kardashian was paid $250,000 to post on her Instagram account about the EMAX token, a coin offered byEthereumMax. Khardashian didn't deny or admit the regulators'allegations in settling the case.
The SEC has warned that celebrities touting cryptocurrencies need to make clear to investors if they are paid for the backing. In 2018, the regulators fined Boxer Floyd Mayweather and music producer DJ Khaled for failing to disclose payments they received for hyping initial coin offerings.
The case is a reminder that when celebrities or influencers endorse investment opportunities, such as crypto asset securities, it doesn't mean that those investment products are right for all investors, SEC Chair Gary Gensler said in a statement on Monday. We encourage investors to consider their investment's potential risks and opportunities in light of their own financial goals. Wall Street's main regulator has stated for a long time that many virtual tokens are securities and under its jurisdiction. The SEC applies a legal test to determine whether or not something is a security, based on a 1946 Supreme Court decision. Under that framework, an asset can be under the purview of the SEC when investors kick in money with the intention of profiting from the efforts of the organization s leadership.