Kim Kardashian, the reality TV star, paid $1.26 million to settle charges related to her online promotion of the EthereumMax digital token, the U.S. Securities and Exchange Commission said Monday.
Kardashian failed to disclose a $250,000 payment to post on her Instagram account about EMAX tokens, the digital asset associated with EthereumMax (a crypto project unrelated to Ethereum, the second largest crypto token). Instagram influencers often fail to disclose paid posts, but Kardashian ran afoul of federal securities laws that explicitly require celebrities or others to disclose details about compensation they receive from such promotions.
In addition to the charges, SEC Chairman Gary Gensler posted a video with guidelines on how to avoid crypto scams, questionable promotions and report fraud:
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Today @SECGov, we charged Kim Kardashian for unlawfully touting a crypto security.This case is a reminder that, when celebrities / influencers endorse investment opps, including crypto asset securities, it doesn’t mean those investment products are right for all investors.October 3, 2022
Steer Clear of Celebrity Endorsements
It's not the first time a famous face has been used to shill for a crypto project. Everyone from Matt Damon to Steph Curry have endorsed projects. But EthereumMax appears to have drawn additional scrutiny. In addition to the SEC action, a class action suit filed in California federal court alleges Kardashian, boxer Floyd Mayweather, Jr., and former NBA player Paul Pierce of making misleading and false statements in promoting EthereumMax
Celebrity-endorsed crypto scams are a real problem. In June, investment bank Santander reported cases of crypto scams in the UK had surged 61% year-over-year, and the average value of a scam increased 65%, an indication that scammers had become more successful in terms of both the number of crimes committed, and an ability to steal more cash from victims.
How to Report Crypto Fraud
In addition to taking steps to protect your digital currency, the FTC offers these resources to file crypto-related fraud complaints:
- the FTC at ReportFraud.ftc.gov
- the Commodity Futures Trading Commission (CFTC) at CFTC.gov/complaint
- the U.S. Securities and Exchange Commission (SEC) at sec.gov/tcr
- the Internet Crime Complaint Center (IC3) at ic3.gov/Home/FileComplaint
- the cryptocurrency exchange company you used to send the money
-
-
Lawmakers Want the IRS to Crack Down on 'Wealthy Tax Cheats'
Tax Enforcement Lawmakers are urging the IRS to go after 1.4 million 'wealthy 'tax cheats' who haven’t filed federal tax returns.
-
Seven Common Misconceptions People Have About Buying a Home
Holding on to these beliefs could be holding you back from realizing your dreams.
-
For a Concentrated Stock Position, Ask Your Adviser This
There can be advantages to having a lot of stock in one company, but ‘de-risking’ can help avoid some significant disadvantages.
-
Three Financial Tips for Women’s History Month
Women still face unique economic and social challenges today, so here are some key things to consider that can lead to a more secure financial future.
-
Worried About Checking Your Portfolio? Don't Be: Things Are Looking Up
Though the markets are still fluctuating, this expert sees an encouraging upward trend and is giving himself permission to check his investments.
-
Laid Off With a Severance Package? Here’s How to Make a Plan
Gathering all the relevant information and staying organized is key, as is getting your financial team involved. Here are five financial planning tips to help.
-
The Markets Were Miserable Last Year, But That’s Great News
It’s all about perspective. Hopefully, you learned that your financial plan can withstand market downturns. If not, now you know you need to make adjustments.
-
How to Pick the Best Robo Advisor For You
Kiplinger's guide to the best robo advisors to fit your needs.
-
6 Questions Your Financial Adviser Should be Asking
To effectively help you with your retirement strategy, a retirement professional must get a clear picture of what you have and what you need.
-
Am I Going to Be OK in Retirement? Yes, With Focus on 5 Key Areas
All it takes is protecting what you save, having an income plan, knowing your health care options, reducing your tax burden and making an estate plan.
