on the crypto
The star influencer with 331 million followers on Instagram has just been fined for promoting a cryptocurrency project without declaring it. A case that is far from isolated, which highlights the sometimes problematic links between influencers and cryptocurrencies.
More than a million dollars in fines for Kim K.
Kim Kardashian has just been charged by the SEC, the American financial regulator, in connection with the illegal promotion of the EthereumMax token. The US regulator accused her of illegally promoting a crypto security.
The influencer star promoted the project on an Instagram story without mentioning that she was paid to do it. The star was paid nearly $ 250.000 to promote the Ethereum Max project's EMAX tokens. The post included a link to the project's website and token purchase process.
As a result, the star will have to pay a $ 1,26 million fine. The company also agreed to work with the SEC as part of the ongoing investigation into the project. Gary Gensler, president of the SEC, said:
This case reminds us that when celebrities or influencers endorse investment opportunity, including crypto stocks, does not mean that these investment products are suitable for all investors. Kim Kardashian should serve as a warning to other celebrities. Celebrities should disclose how much they are paid to promote a particular investment.
What the US law says
Under the US Federal Securities Act, anyone who promotes a cryptocurrency or other security must declare the nature, source and amount of compensation received. One of the SEC's top officials, S. Grewal, states in this regard:
Investors need to know if project advertising is impartial and objective. In this case, Ms. Kardashian did not disclose this information.
For her part, the star acknowledges the facts and therefore agreed to pay the $ 1,26 million required by the SEC. This amount corresponds to compensation of $ 260.000, which includes the initial payment plus interest, as well as a penalty of $ 1 million.
A nice sum that Kim Kardashian will be able to pay back. The latter heads a fortune estimated at over a billion dollars, according to Forbes magazine. In addition to this fine, Kim Kardashian has pledged not to promote any other cryptocurrency projects in the next 3 years.
Similar cases
Kim Kardashian's example is not an isolated case. In France, Nabilla was fined € 20.000 for covertly promoting an online trading course on her Snapchat account. The latter had promoted a site specializing in the sale and purchase of Bitcoin. Again, not to mention that she was paid to do it.
Moreover, he had made it pass for a safe investment, ignoring the dangers that any investment entails. She agreed to pay the € 20.000 fine and made amends on her Twitter account.
More and more influencers are promoting cryptocurrency or NFT projects. In most cases, these are far-fetched and invalid projects. To tackle this scourge, the government has published a guide to preventing scams on social networks. It presents various social media as "main entry points for scams". These scams are numerous in the cryptocurrency industry.
