Kim Kardashian fined $1.26 million
Kim Kardashian has been fined $1.26 million for failing to disclose to her 330 million Instagram followers that she was paid $250,000 for promoting EthereumMax, a crypto token.
Kim Kardashian was fined by the Securities and Exchange Commission (SEC) in the US, as a failure to disclose payment for touting a stock is a direct violation of federal securities law. The SEC state that celebrities must tell their followers when they are being paid to promote investments online.
Kim Kardashian did use the hashtag #ad, but implied that her friends had told her about the coin, instead of mentioning her ties to the company. The post included a link to instructions as to how the tokens could be bought.
The chairman of the SEC Gary Gensler said that ‘this case serves as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities’. Gurbir Grewal the director of the SEC’s enforcement division said ‘investors are entitled to know whether the publicity of a security is unbiased and Ms Kardashian failed to disclose this information’.
Not only has Kim Kardashian been fined $1.26 million, she has also agreed to refrain from promoting any crypto asset securities for three years. This is in stark contrast to the UK where the Advertising Standards Authority (ASA) and the Financial Conduct Authority (FCA) have called out influencers and brands for posting misleading ads in relation to crypto currencies, but no harsher punishments have been awarded, should the UK be following a similar tact?
All in all, it is a reminded to brands and influencers a like the importance of being up to date with rules and regulations relating to the promotion of crypto currencies.