Kim Kardashian has agreed to pay a fine of $1.26 million for Ethereum Max on her Instagram page.
The US Securities and Exchange Commission said Kardashian received $250,000 for this operation, without revealing that she received money to do this .
The superstar also agreed not to promote crypto-asset securities for three years.
“Kardashian is pleased to have resolved this matter with the SEC,” her lawyer told BBC News.
“Kardashian has fully cooperated with the SEC from the start and remains willing to do everything she can to help the SEC with this matter,” the attorney said. “She wanted to put this matter behind her to avoid a long-running dispute.”
“The agreement it has reached with the Securities and Exchange Commission allows it to do so so that it can move forward with its many different business endeavors,” he continued.
misleading promotion
Investors sued Kardashian, boxer Floyd Mayweather Jr., basketball player Paul Pierce and the inventors of Ethereum Max in January.
The lawsuit alleged that they cooperated to “misleadingly promote and sell” the cryptocurrency in a scheme to inflate the price before selling to investors.
Ethereum Max opposed these allegations at the time, and despite its name, it had no legal or commercial relationship with the digital currency “Ethereum”.
Joe Teddy Analysis – Cyber Correspondent
Anyone can create a cryptocurrency, all you need is a few pounds, a YouTube tutorial, and a funky name.
This month alone, dozens of new tokens will be launched, with their makers promising that theirs will be something great.
With little intrinsic value to a product, marketing is key, and as in many modern industries, celebrities can be the key to a product’s success.
The Ethereum Max invested a huge amount of money to hunt down celebrities like Kim Kardashian, and it looked like it worked at first.
But as with many cryptocurrencies, the decline was as dramatic as the rally.
Even if Ethereum Max retains the value it gained following promoting the celebrity, regulators in both the US and Britain have been very uneasy regarding marketing the coin.
The crypto industry remains largely unregulated, but Kardashian joins a growing list of people and companies who are being penalized for these high-risk products.
“Very speculative”
Gary Gensler, who heads the Securities and Exchange Commission, called the case a “reminder” that celebrity endorsements did not necessarily make a product worth investing in.
“Ms. Kardashian’s case is also 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 investment in securities,” he said.
Later, in a YouTube video regarding investing in crypto or digital currencies, Gensler added, “Celebrities promoting a product doesn’t mean it’s right for you or even, let’s say, legitimate. Even if the celebrity endorsement is real, every investment has its own risks and opportunities.
“When it comes to cryptocurrencies, remember that many of these assets are subject to many speculations. You may wonder if this is right for you or even if it is a scam,” he added.
