Kim Kardashian just agreed to pay a $1.26 million fine for promoting cryptocurrency on Instagram! Here is what you need to know…
Kim Kardashian Fined $1.26 Million For Promoting Crypto!
On Monday, October 3, 2022, Kim Kardashian agreed to pay a $1.26 million fine for promoting the cryptocurrency, EthereumMax (not to be confused with Ethereum) on Instagram.
The Securities and Exchange Commission (SEC) charged that the reality TV star received $250,000 to advertise EthereumMax without disclosing she was paid to promote it.
She also agreed not to promote any crypto assets / securities for three years.
The settlement comprised of a $1 million fine, seizure of the $250,000 payment she received, plus interest, coming up to a total of $1.26 million.
Despite the large sum, the fine will not bother Kim Kardashian too much. With a net worth estimated at $1.8 billion, the $1.26 million fine is roughly equivalent to an $85 fine for a typical US family with a net worth of $122,000.
Her lawyers hinted as much in the statement they released :
As you can tell – the fine was more like dust in her eyes than a lesson to learn from. I doubt it even feels like a slap on the wrist to her.
How Kim Kardashian Got Into Trouble Promoting Crypto…
On June 13, 2021, Kim Kardashian promoted a new cryptocurrency called EthereumMax (not to be confused with the famous and more established Ethereum) on Instagram.
She had 225 million followers on Instagram at that time, and EthereumMax paid her $250,000 for that post.
Despite the misleadingly similar name, EthereumMax has no legal, business or technical connection to the Ethereum cryptocurrency. One could be forgiven for thinking that they were trying to mislead people into thinking that they are the same – they are not!
In January 2022, Kim Kardashian, boxer Floyd Mayweather Jr, basketball player Paul Pierce and the creators of EthereumMax were sued by investors who alleged that the celebrities collaborated to “misleadingly promote and sell” the cryptocurrency in a “pump and dump” scheme.
The class action lawsuit filing pointed out that such promotion caused EthereumMax to increase more than 1,300% in value (the pump) before plummeting to “an all-time low” just over a month after Kim Kardashian promoted it.
It alleged that this enabled the defendants to sell EthereumMax tokens for “substantial profits” (the dump) before the inevitable crash in value.
It is unknown how many investors were hurt, but after the initial celebrity-fuelled surge, EthereumMax quickly tanked and never recovered.
This is another lesson in why you should not take investment advice from celebrities, especially when they are only famous for … being infamous?
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