The U.S. government has accused Kim Kardashian, a famous celebrity, of promoting a cryptocurrency on her Instagram account without revealing that she was paid for it. The Securities and Exchange Commission (SEC), the financial regulator, has taken action against her. Kardashian has agreed to pay a fine of $1 million, but she has not admitted or denied the SEC's findings. She will also return $260,000, which includes the money she received for the promotion along with interest.
This situation serves as a reminder to celebrities and others that they must inform the public about how much they are paid when they promote investment opportunities. The SEC chair, Gary Gensler, emphasized the importance of following the law in this regard.
Kardashian, who has a large following of about 330 million people on Instagram, received $250,000 to promote a cryptocurrency called EMAX tokens offered by EthereumMax. According to the regulators, her post also included instructions for potential investors to buy these tokens. This violated a provision in the securities laws that prohibits promoting securities without proper disclosure.
As the popularity of cryptocurrencies has grown, companies have spent a lot of money on marketing them. Many of these companies have hired celebrities like Larry David and Matt Damon to endorse their products. However, when the value of Bitcoin and other cryptocurrencies dropped, these celebrities faced criticism for their role in promoting them.
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