Various celebrities, including Kim Kardashian and Matt Damon, have promoted the volatile world cryptocurrency, but the former in particular was pulled up for it on Monday.
The reality television celebrity was charged with a $1.26 million fine by the Securities and Exchange Commission (SEC) of America, for 'unlawfully' posting an advertisement for a cryptocurrency on her Instagram page in June 2021.
Legal provisions mandate celebrities to not only disclose the sponsored nature of their posts in such cases, but also the amount they were paid to endorse the cryptocurrency.
The press release said: "The SEC’s order finds that Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens, the crypto asset security being offered by EthereumMax."
Kardashian didn't admit or deny the commission's findings, but agreed to pay the aforementioned $1.26 million, including approximately $260,000 in disgorgement.
In addition, she also agreed to not promote any crypto asset securities for three years.
SEC chair, Gary Gensler doubled down on the legalities around endorsing crypto-asset securities, in the release.
"Ms. Kardashian's case also serves as 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 investing in securities," he said.
Besides Kardashian, other public figures like Matt Damon and Larry David have also been part of similar promotions, but weren't charged by the law.
According to Axios, the coin that she advertised qualifies as a security, which brings it under the jurisdiction of the SEC, hence why she was slapped with the fat fine.
The moral of the story is if you decide to advertise crypto, promote the company and disclose how much they paid you to do so.