September 24, 2023

Fraud Analysis

SEC fines Kim Kadarshian with $1.26m for violating Provisions on Crypto Promotion

Popular celebrity Kim Kardashian has been charged $1.26 million by the US Securities and Exchange Commission (SEC) for not adhering to the anti-touting provision of the federal securities laws.

According to the SEC, Kardashian received $250,000 from a crypto asset offering company EthereumMax (EMAX). She had to post on her Instagram handle about EMAX tokens, which she did, but she did not disclose the amount she received for this promotion. Her post had a link to visit the EMAX website, where investors could buy EMAX tokens.

The director of the SEC, Gurbir Grewal, notes that federal securities law mandates that an individual/celebrity who takes part in promoting a crypto asset security has to disclose the source, nature, and the actual amount received in lieu of compensation for the same.

Kim did not admit or deny when asked about SEC’s findings, but without wasting any time, she agreed to pay the amount of $1.26m, which comes to approximately $260,000, including interests, as well as a penalty of $100,000. She also agreed not to promote any crypto securities for upto three years.

Gary Gensier from SEC comments that this incident should be bookmarked; whenever any influencer endorses any investment opportunities, that doesn’t automatically mean all those products are good choices for investment

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