American model, media personality and social media influencer Kim Kardashian are one of the highest-paid celebrities across the globe. In fact, as per the data released by Hopperhq, it was recently revealed that Kim Kardashian is one of the highest-paid celebrities on Instagram. She enjoys a crazy fan following of 331 million followers on Instagram, hence she charges a whopping amount to promote brands on the platform.
But recently something happened that dragged Kardashian into trouble. The diva has been charged with a penalty fine of $1.26 Million and that too is concerned with the promotions on Instagram.
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Kim Kardashian recently posted about EMAX tokens, the crypto asset security being offered by EthereumMax. But unfortunately, she did not specify or disclose in the post (mandatory) that she has been paid to promote the same. Her post was also linked to EMAX’s website. A potential customer is offered instructions to buy the digital coins once on EMAX’s website.
This activity indeed is unlawful in the US, as the controlling authority, the SEC, notified in 2017 that all celebrity endorsements must disclose the amount the company paid directly or indirectly for the promotion. In addition, investors must research celebrity recommendations.
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Hence, the Security and Exchange Commission has imposed a big fine on Kim Kardashian, and the celebrity on the other hand has agreed to settle the issue. As per the reports of Times Of India, The fine includes a penalty of $1 million plus $260,000, representing the amount Kardashian paid plus interest, the SEC said in a statement. She also agreed not to promote any crypto asset securities for three years.
“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,” said SEC Chair Gary Gensler in the statement.
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Moreover, Kim Kardashian has also agreed not to promote any kind of crypto assets for the next 3 years. Although, she can continue to get paid and promote other brands but she will have to disclose the details about the charged money and paid promotion deal.