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Kim Kardashian will pay a $1.3 million fine to resolve SEC complaints

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Halima Zayan
Halima Zayan
I'm Halima Zayan. I specialize in topics like culture, travel, politics, and food.
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After being cited by the SEC, Kim Kardashian of New York City agreed to pay $1.3 million. While promoting the cryptocurrency EthereumMax on Instagram, Kim Kardashian agreed to resolve legal accusations.

Kardashian was paid $250,000 to get her Instagram post published. Kim consented to pay the penalties and assist the SEC’s continuing inquiry.

Celebrities or other influential people may promote investment possibilities, but that does not always indicate that those products are suitable for investors, according to Gary Gensler, chairman of the SEC. The SEC advises investors to consider their financial objectives when evaluating an investment’s possible risks and possibilities.

After being charged, Kardashian promised to refrain from endorsing any cryptocurrency assets for three years. Ms. Kardashian is delighted to have handled this dispute with the SEC, her counsel stated at the proceeding.

Kardashian’s Agreement with the SEC

Kardashian works with the SEC and is ready to help in any way she can. She wanted to put this issue behind her to prevent a drawn-out argument.

The agreement said that the SEC permits her to do it to advance her numerous business endeavors. At the same time, Kardashian violated a federal securities law rule that prohibits promotion.

Kardashian complied with the ruling without contesting or rejecting the SEC’s conclusions. In the agreement, Kardashian will pay a $250,000 forfeit and a $1 million penalty to the SEC.

According to Charles Whitehead, a professor at Cornell Law School, the SEC targeted Kardashian to send a message to other influencers pushing cryptocurrencies or other financial assets.

He said it was a “shot across the bow” for well-known crypto endorsers. It is a warning for celebrities who want to engage with cryptocurrency, and now is the time to reconsider.

She is also a spokesperson for the SEC, which wants to increase adherence to securities regulations. It’s a good idea to draw awareness to the situation so that others won’t do it. Whereas in the past, in 2018, DJ Khaled, a music producer and boxer Floyd Mayweather Jr., received penalties for promoting cryptocurrencies.

Mayweather was paid $300,000 and made sufficient payments totaling just over $600,000. Khaled, in contrast, was fined more than $150,000 and granted compensation of $50,000.

In her Instagram post on June 13, 2021, Kardashian said, “Are you guys into crypto?” In her remark, Kardashian offered no financial guidance but expressed her opinions on the EthereumMax coin.

She also included other hashtags, such as #ethereummax, #ad, and #disrupthistory. When the post was released, Kardashian had 225 million followers on Instagram.

Gensler said that the advertising “is insufficient to conform to SEC standards governing the marketing of investing” in an interview with CNBC on Monday.

Gensler said, “Whenever you advertise anything online, whether it’s perfume, vacation rentals, or anything else. Although there are other laws about that, these are the securities laws “.

Kardashian’s net worth is $1.8 billion, according to Forbes. According to the statistics provided by Federal Reserves, a $1.26 million fine is roughly equivalent to a fine of less than $100 for a typical US family.

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