JAKARTA - Socialite from the United States, Kim Kardashian will pay a fine of 1.26 million US dollars for his involvement in promoting a cryptocurrency scheme called EthereumMax (EMAX).
The United States Securities and Exchange Commission (SEC) indicted Kardashian on October 3 for "touting on social media the security of crypto assets offered and sold by EthereumMax" without revealing the payments he received for his promotional involvement.
Kardashian has agreed to settle charges and pay a fine of $1.26 million, release and interest and is regulated to cooperate with further investigations by the SEC into the EthereumMax project.
The announcement noted that Kardashian failed to disclose the US$250,000 payment he received to publish a post on his Instagram profile promoting EMAX tokens with links to the project website.
An order by the SEC found that Kardashian violated the provisions of anti-promotion of federal securities laws. This has also happened to other leading cryptocurrency securities violations involving the SEC in the past.
Kardashian did not admit or deny the SEC's findings but agreed to resolve the allegations. The fine was broken down to $260,000 as well as a $1 million penalty. Kardashian also agreed not to promote any cryptocurrency assets until 2025.
SEC chairman Gary Gensler also used the order to advise the general public to conduct due diligence when investing in cryptocurrency assets, while reminding celebrities and influencers of their obligation to disclose payments related to securities promotions.
"This case is a reminder that, when celebrities or influencers support investment opportunities, including crypto asset securities, that doesn't mean that the investment product is right for all investors. We encourage investors to consider potential risks and investment opportunities given their own financial goals," Gensler said as quoted by Cointelegraph.
Kardashian's legal team also filed a motion to rule out complaints of class-action aimed at businessmen and other American celebrities in August 2022. Kardashian and several other leading American social media influencers were charged with a class action complaint in January 2022 over claims that they misled investors through EthereumMax social media promotions.
Kardashian posted an Instagram story promoting the project in June 2021, along with other public figures such as great boxer Floyd Mayweather who was also involved in the lawsuit after promoting Ethereum-based tokens in preparation for the celebrity boxing bout against YouTuber Logan Paul over the same period.
In the promo, fans can buy pay-per-view tickets with tokens, which soar after promotion by Kardashian and other influencers. The value of EthereumMax dropped significantly after that, even though the promo had made many people spend money out of their pockets.
The original court filings that registered Kardashian, Mayweather, and eight others claim that the company's executives have collaborated with celebrity promoters to make misleading statements about their tokens and control over most of the tokens. Steve Gentile and Giovanni Perone are listed as co-founders of the project.
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