Kim Kardashian pays SEC $1.26 million to settle EthereumMax charge

Kim Kardashian pays SEC $1.26 million to settle EthereumMax charge

Kim Kardashian, an American socialite, will be fined $1.26 Million for her participation in the promotion of a cryptocurrency program called EthereumMax (EMAX).

On Oct. 3, the United States Securities and Exchange Commission (SEC), announced Kardashian’s charges for “touting” on social media a cryptocurrency asset security offered and sold at EthereumMax, without disclosing the payment she received for her promotion involvement.

Kardashian agreed to settle the charges, pay $1.26 Million in penalties, disgorgement, and interest. She will also cooperate with the SEC’s investigations into the EthereumMax project.

In the announcement, Kardashian was not required to reveal a $250,000 payment that she received in order to post a post on Instagram promoting EMAX tokens and linking to the project’s site.

SEC found that Kardashian had violated federal securities laws’ anti-touting provisions. Similar cases have been made in the past with SEC officials involving prominent cryptocurrency securities violations.

Kardashian did not admit or deny the findings of the SEC, but she agreed to settle the charges. The settlement was made up of $260,000 in disgorgement and a $1,000,000 penalty. Kardashian also committed to not promoting cryptocurrency assets beyond 2025.

@SECGov today charged Kim Kardashian with illegally promoting a crypto security. This case serves as a reminder that just because celebrities or influencers endorse investment options, such as crypto asset securities, doesn’t necessarily mean they are right for everyone.
— Gary Gensler (@GaryGensler), October 3, 2022

Gary Gensler, chairman of the SEC, used the order to remind the public and celebrities of their obligations to disclose any payments related to securities promotions.

“This case serves as a reminder that just because celebrities endorse investment opportunities (including crypto asset securities), it does not mean that they are suitable for all investors. We urge investors to evaluate the potential risks and benefits of any investment in light their financial goals.

Kardashian’s legal team filed a motion to cancel a class action complaint against her and other celebrities in August 2022. In January 2022, a class action complaint was filed against Kardashian and other prominent American social media influencers over allegations that they deceived investors by promoting EthereumMax.

Kardashian shared Instagram stories in June 2021 promoting the project. Floyd Mayweather, boxing legend, was also involved in the lawsuit. He promoted the Ethereum-based token during the celebrity boxing bout against Logan Paul.

The token could be used to purchase pay-per view tickets. This was possible after Kardashian and other influential celebrities promoted it. Many were left out of pocket when EthereumMax’s value dropped dramatically.

Kardashian, Mayweather, and eight other celebrities were listed in the original court filing. They claimed that celebrity promoters had conspired with company executives to make misleading statements regarding the token and their control over the majority of tokens. Co-founders of this project were Steve Gentile, Giovanni Perone.

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