Kim Kardashian agreed on Monday to pay a $1.26 million fine to settle charges brought against her by the US Securities and Exchange Commission for promoting the cryptocurrency EthereumMax without disclosing the fact that she was paid to promote it.
According to a press release, the SEC said its investigation found that Kardashian had received $250,000 for promoting the cryptocurrency on her Instagram account, which she did not disclose.
In addition to the fine, Kardashian agreed not to promote any cryptocurrency for the next three years.
Advertising had the biggest economic impact in history
The FCA chairman noted that Kim Kardashian’s Instagram story post, which was correctly labeled as an advertisement (paid post), may have been “the most impactful financial promotion in history.”
At the same time, he clarified that Ethereum Max should not be confused with the well-known cryptocurrency Ethereum.
The FCA chairman stressed that he cannot know whether this cryptocurrency is a scam, but added that “social media influencers are very often deceived or paid by scammers whom they are essentially helping to inflate the price of new cryptocurrencies.” Indeed, he noted that some influencers have happened to promote currencies that turn out not to even exist.
The BBC reports that an estimated 2.3 million Britons are in possession of cryptocurrency. 14% of them have borrowed money to buy them. The FCA has repeatedly warned that this is a high-risk investment. “If you buy them, you should also be prepared to lose all your money,” Randell stressed.
