Kim Kardashian settles charges for unlawfully touting crypto security
Categories: Crypto News
Kim Kardashiansettles charges for 'unlawfully touting crypto security'
Kim Kardashianagreed to pay $1.26 million to settle charges brought by the Securities andExchange Commission, which alleged she unlawfully promoted a cryptocurrencyover Instagram in June of last year.
The SEC saidthe reality TV superstar and celebrity influencer endorsed Ethereum Max'scrypto token for $250,000 last year without disclosing the payment shereceived for the promotion, violating the anti-touting provision of the federalsecurities law.
Thesettlement includes $260,000 in disgorgement and interest and $1 million inpenalties. Additionally, Kardashian agreed to to not promote any crypto assetsecurities for three years and will cooperate with the U.S. regulator's ongoinginvestigation. She agreed to the settlement without admitting to or denying SEC'sfindings.
"Thiscase is a reminder that, when celebrities or influencers endorse investmentopportunities, including crypto asset securities, it doesn't mean that thoseinvestment products are right for all investors," said SEC Chair Gary Gensler in a statementreleased by the agency on the matter.
Last yearduring crypto's bull run, numerous celebrities increased the hype arounddigital assets by endorsing various crypto tokens on their social mediaplatforms — which can have major reach.
Forinstance, Kardashian's Instagram account is ranked as the platform's 9th mostinfluential account worldwide, according to Hypeauditor.com. Her clothingbusiness SKIMS — estimated to be worth of $3.2 billion — is also thesecond-highest valued celebrity-owned business, according to a recent report byLondon-headquartered Investing app, Invezz.
"Ms.Kardashian's case also serves as a reminder to celebrities and others that thelaw requires them to disclose to the public when and how much they are paid topromote investing in securities," Gensler said in the statement.
Since the cryptomarket's peak in November of last year, the total market capitalization forthe asset class has hurtled 67% lower from $2.8 trillion to $928 billion,according to Coinmarketcap.
A recent conductedby Bankrate found that U.S. investor comfort in cryptocurrencies has plummetedsince last year, particularly among millennial and generation Z investors whouse social media as a primary investing source.