Reality TV star did not disclose that she was paid to promote crypto assets in an Instagram post.
Kim Kardashian paid US regulators $1m to settle charges that she failed to disclose that she was paid to endorse a crypto asset via an Instagram post.
Reality TV star, social media influencer, and entrepreneur is worth $1.8bn (PS1.6bn). He has agreed to pay $1.26m to the Securities and Exchange Commission (SEC), to settle the charges.
In June 2013, she was paid $250,000 to write about crypto security tokens that EthereumMax sold on her Instagram account. Kardashian asked her 220 million Instagram followers, “Are your guys into crypto?” ?”
The hashtag #ad was used in the post. It also included a link that took users to the EthereumMax website. This site provides instructions on how to purchase the tokens.
The SEC stated that Kardashian’s failure not to disclose the payment was a violation federal securities laws.
Gary Gensler (chair of the SEC) stated that “this case is a reminder” that celebrities and influencers don’t necessarily endorse investment opportunities.
Kardashian, with more than 330 million followers on Instagram, has agreed to stop promoting crypto assets for three consecutive years and will cooperate fully with the SEC investigation. She has not admitted to or denied the findings of the regulator.
She was represented by a lawyer who said that Kardashian had fully cooperated from the beginning with the SEC and is willing to help the SEC in this matter.
She wanted to put this matter behind her and avoid a prolonged dispute. She reached an agreement with the SEC to allow her to move on with her business endeavors.
After Kardashian posted the promotional video for EthereumMax, Charles Randell , the former chair of the UK Financial Conduct Authority, criticized her.
The UK regulators have taken steps to curb the promotion and marketing of cryptocurrency to the general public, who are mostly unaware of the volatility of such investments and the risks involved.
Two promotions for “fan tokens,” from Arsenal Football Club were banned by the UK advertising regulator in December. They were deemed to have misled supporters about the dangers of investing in cryptocurrency.
The Advertising Standards Authority stated that Premier League took “advantage consumers’ inexperience and credulity, trivialising investments in crypto assets, misleading consumers about the risk of investing, and not making clear the token was a cryptocurrency asset.”
The ASA previously prohibited a campaign by a cryptocurrency company telling the public that it was time to purchase bitcoin.
The Treasury announced plans in January to clamp down on misleading cryptocurrency advertisements by making them as subject to the same regulations that marketing for other financial products like shares or insurance.
