Kim Kardashian pays US$1.26m fine over crypto advertising
U.S. TV star and businesswoman Kim Kardashian has agreed to pay a US$1.26 million fine for advertising a crypto currency, EthereumMax, on her Instagram.
The U.S. Securities and Exchange Commission (SEC) said Kardashian had failed to disclose that she was paid US$250,000 to publish her Instagram post. The commission said Kardashian violated the anti-touting provision of federal securities laws.
“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,” said SEC Chair Gary Gensler.
“We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
In addition to paying the fine, Kardashian also agreed to refrain from promoting any crypto securities for three years. She however did not admit or deny the SEC’s findings.
Her lawyers said the TV star was pleased to resolve this matter with the SEC. “Kardashian fully cooperated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter. She wanted to get this matter behind her to avoid a protracted dispute.”
“The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits.”
In June, the U.S. government reported that revenues from NFTs could exceed US$130 billion by 2030 and contribute to the development of the digital economy. But despite the attention and celebrity support, the general public does not fully understand NFTs. Some celebrities warned against calling NFTs investments because of the risks involved.
In August, TINA.org, a U.S. non-profit organization that raises awareness about false advertising, sent a letter to more than a dozen celebrities who have posted about NFTs on their social networking sites, including Gwyneth Paltrow and Eva Longoria, former professional boxer Floyd Mayweather, and football player Tom Brady.
The group asked the celebrities to clarify their relationships with NFT distributors, and reminded them that if an endorser has a material connection to a brand or company, it must be clearly disclosed under the Federal Trade Commission Act (FTC Act).