If you’re a billionaire, taking out $1.2 million to settle some charges seems like taking a drop of water from the ocean. And that’s what Kim Kardashian has decided. The “SKIMS” founder has agreed to pay $1.2m in a settlement agreement with the Security and Exchange Commission amid charges that she “unlawfully touted a cryptocurrency without disclosing she was being paid for the promotion”.
Neither Agreed Nor Denied, Just Settled…
Kim Kardashian, who reportedly has a 1.8 billion net worth, decided to pay $1.2 million in a settlement agreement with Security and Exchange Commission. In addition to this, the “Keeping Up With The Kardashian” star has also agreed not to promote any crypto assets fo
Kardashian is paying the settlement without admitting to or denying the SEC’s findings, the agency said on Monday. She also agreed to not promote any crypto asset securities for three years. It has come out that Kim did not disclose that she received $250,000 to post about EhtereumMax tokens.
In an Instagram story, Kim wrote: “ARE YOU INTO CRYPTO??? THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN.” Investors sued her, former NBA star Paul Pierce and superstar boxer Floyd Mayweather Jr. earlier this year over their promos for EthereumMax, accusing them of “artificially inflating the value of the asset”.
“The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source and amount of compensation they received in exchange for the promotion,” Gurbir Grewal, director of the SEC’s division of enforcement, said in a prepared statement.
SEC Chairperson, Gary Gensler released a statement: This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto-asset securities, it doesn’t mean that those investment products are right for all investors.
The hefty fine comes after Kim Kardashian used her fame to hype up the cryptocurrency EthereumMax or Emax. However, she got her name on a class-action lawsuit in January over this endorsement.
The Declining Value Of EMAX…
The Securities and Exchange Commission determined that the “SKIMS” founder violated the anti-touting provision of the federal securities law. However, Kim has decided to pay a fine of $1.2 million in a settlement offer: $1 million as a penalty and $260,000 in disgorgement. Per SEC, this covers the undisclosed amount Kim receievd along with prejudgment interest.
As for EMAX, the crypto currency’s price fell 3.3 to the equivalent of 0.000000004246 cents, according to CoinMarketCap. At the time Kim promoted EMAX, she has around 225 million followers on Instagram. Emax was launched last year with a trading volume of $16.1 million. It grew after the crypto asset was promoted by celebrities like Kardashian and NBA star Paul Pierce. Boxer, Mayweather was another celebrity who promoted this cryptocurrency.
In January 2022, lawyers filed a class-action lawsuit against the aforementioned celebrities, claiming that they acted as “celebrity endorsers of EthereumMax, or EMAX, which was pitched to investors as a disruptive new cryptocurrency.” However, the endorsements were a ruse by the EMAX creators to inflate the price of the token.
The lawsuit also alleged that the digital coin’s creators, Steve Gentile of Connecticut and Giovanni Perone of Florida, then sold their holdings of EthereumMax “for substantial profits. It was also alleged in the suit that Gentile and Perone “marketed the EMAX tokens to investors so that they could sell their portion of the float for a profit.”
In a statement, a lawyer for Kardashian said she is pleased to have resolved the matter. The statement reads as: “Kardashian fully cooperated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter. She wanted to get this matter behind her to avoid a protracted dispute.”
The lawyer added, “The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits.” Well, Kim is out of it, and why not, if you have that kind of money, anything is possible.