October 3, 2022
photo released, Getty Images
Kim Kardashian agreed to pay a $ 1.26 million fine for advertising Ethereum Max on her Instagram page.
The US Securities and Exchange Commission said Kardashian received $ 250,000 for advertising this deal, without disclosing that he received any money to do this publicity.
The superstar also agreed not to promote cryptocurrency stocks for three years.
“Kardashian is delighted to have resolved the matter with the SEC,” her attorney told BBC News.
“Kardashian has cooperated fully with the SEC since the beginning and remains willing to do whatever it takes to help the SEC in this matter,” the attorney said. “She wanted to leave this matter behind to avoid a longstanding dispute.”
“The deal it has reached with the Securities and Exchange Commission allows it to do so so that it can move forward with its many and varied business commitments,” he continued.
misleading promotion
Investors sued Kardashian, boxer Floyd Mayweather Jr., basketball player Paul Pierce, and the inventors of Ethereum Max in January.
The lawsuit claimed to have worked together to “deceptively promote and sell” the cryptocurrency in a scheme to inflate the price before selling it to investors.
Ethereum Max at the time opposed these allegations and, despite the name, had no legal or commercial relationship with the digital currency “Ethereum”.
Joe Teddy Analysis – IT correspondent
Anyone can create a cryptocurrency, all you need is a few pounds, a YouTube tutorial and an original name.
This month alone, dozens of new tokens will be launched, with their creators promising that theirs will be something great.
With little intrinsic value to a product, marketing is key and, as in many modern industries, celebrities can be the key to a product’s success.
The Ethereum Max invested a huge amount of money to hunt down celebrities like Kim Kardashian, and at first it seemed like it worked.
But as with many cryptocurrencies, the decline was as dramatic as the rally.
Even though Ethereum Max holds the value it gained after promoting stardom, regulators in both the US and Britain have been very uncomfortable in marketing the coin.
The cryptocurrency industry remains largely unregulated, but Kardashian joins a growing list of people and businesses who are penalized for advertising these high-risk products.
“Very speculative”
Gary Gensler, head of the Securities and Exchange Commission, called the case a “reminder” that celebrity endorsements weren’t necessarily a product worth investing in.
“Ms. Kardashian’s case is also a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investment in securities,” he said.
Later, in a YouTube video about investing in cryptocurrencies or digital currencies, Gensler added: “Celebrities promoting a product doesn’t mean it’s right for you or even, let’s say, legitimate. Even if celebrity endorsement is real. , each investment has its own risks and opportunities.
“When it comes to cryptocurrencies, remember that many of these assets are subject to a lot of speculation. You may be wondering if this is right for you or even if it is a scam,” he added.
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