Kim Kardashian has been fined USD$1 million (AUD$1.5 million) for spruiking crypto to her fans without specifying her post was an ad, and has to pay back interest and her profits to boot. Ooft.
Kim uploaded a post to Instagram promoting EthereumMax tokens which, according to the US Securities and Exchange Commission, she was paid USD$250,000 (AUD $384,000) to do. $384,000! For one post! Imagine how many years it would take normies like us to make that much money.
However, naughty Kim did NOT make it clear the post was sponcon.
As you may know from the countless influencers that have been pinged for this, not telling your followers that certain content is an ad is bad — but this gets more serious with crypto and investments because the value of these products literally hinges on how many people buy them. That means there are very strict guidelines, part of which involves having to disclose if you are being paid to promote a cryptocurrency.
Kim, Floyd Mayweather Jr, basketball player Paul Pierce and EthereumMax’s creators were all sued by investors in January after they were accused of “misleadingly promot[ing] and sell[ing]” the cryptocurrency in a “pump and dump” scheme which basically inflates the price before selling to investors. Dodgy indeed.
To pay for her sins, Kim not only has to cop her hefty $1.5 million fine (plus interest) and stay TF away from crypto ads for three years — she also has to give up the money she was paid for her post and any profits she may have made. Which totals close to $2 million. Though honestly, I doubt that makes much of a dent in her savings.
“Ms. Kardashian is pleased to have resolved this matter with the SEC,” Kim’s lawyer said in a statement, per E! News.
“Kim 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.”
Today @SECGov, we charged Kim Kardashian for unlawfully touting a crypto security.
This case is a reminder that, when celebrities / influencers endorse investment opps, including crypto asset securities, it doesn’t mean those investment products are right for all investors.
— Gary Gensler (@GaryGensler) October 3, 2022
If you’re wondering whether this will affect Kim’s bid to become an attorney, the answer is yes — but barely.
“There is a character and fitness evaluation that everybody who wants to become a lawyer has to go through and they look for things like arrests, they look at things like being sued,” adjunct professor of securities law at Northwestern University Andrew Stoltmann told E! News.
“And this is a pretty significant issue for her. So, is it a potential speed bump to becoming a lawyer? Yes. Do I think it will preclude her from becoming a lawyer? No.”
Why am I not surprised?
