Kim Kardashian, the reality TV star, was slapped with a fine of $1.26 million by the SEC as she failed to disclose the amount she earned for promoting a product related to cryptocurrency. When a celebrity invests in a product, some of their followers blindly follow them and invest in the same brand or product to mimic their favorite star’s likings.
Similarly, Ms. Kardashian also endorsed a crypto related service (EMAX Tokens) from EthereumMax and hid the earnings derived from the company and so was slapped with a hefty penalty
Often such activities lead to the situation where investors are left in the dark with false prerogatives, thus leading them towards investment frauds.
Gary Gensler, the Chairperson of SEC, confirmed the penalty and urged investors not to follow the advice of influencers and instead probe down the investment potential risks that can eventually hinder their financial goals.
Kim is all set to pay the fine without clarifying whether the SEC findings were completely true. In fact, she has also directed her legal team/s to sort out the matter with no media attention.
NOTE 1- When celebrities invest in cryptocurrencies, their followers automatically buy or avail products and services that are being endorsed. As celebrities are investing more in digital currencies, it attracts others and can lead to unnecessary chaos such as currency gain against dollar leading to economic disruptions and sometimes leading to recession.
NOTE 2- It is unclear whether Kim was involved in any kind of Ponzi investment scam or her account was taken over by some internet gang to post promotional content.
