Kim Kardashian has been slapped with a $1 million fine by the US markets watchdog for unlawful crypto advertising.
The model and businesswoman was paid $250,000 to publish a post to her Instagram page advertising EthereumMax crypto tokens. The US Securities and Exchange Commission said Kardashian posted a link to the EthereumMax website but failed to disclose the payment she received for the promotion.
SEC chair Gary Gensler said: “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.”
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, said: “Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information."
The SEC said Kardashian agreed to pay $1.26 million, which which represents her promotional payment, plus prejudgment interest, and a $1,000,000 penalty. Kardashian also agreed to not promote any crypto asset securities for three years.
Gensler posted a video to YouTube warning investors not to make investor decisions based on the recommendations of a celebrity or influencer.
“Celebrity endorsements don’t mean than an investment product is right for you, or even, frankly, that it’s legitimate,” he said in the video.
“We might enjoy watching a celebrity playing on a basketball court, starring in reality TV show or movie…we shouldn’t confuse those skills though, with the very different skills needed to offer appropriate investment advice.”
