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The Securities & Exchange Commission (SEC) is a federal government agency that regulates the financial market, has was accused of Kim Kardashian with unlawfully promoting the EthereumMax crypto asset on June 20, 2021. The SEC also announced that Kim. Kardashian had agreed to pay the $1.26 million penalty, assisting the ongoing investigation of the SEC into the issue, and committing not to endorse any crypto security over the next three years.
The SEC accused Kardashian of promoting a cryptocurrency security for assets that was sold via EthereumMax through Instagram without revealing that she was compensated to advertise the security. At the time she. Kardashian had over 225 million Instagram followers. She was compensated $250,000 to help promote the EthereumMax network and its cryptocurrency asset, the “EMAX Token.” She posted “sharing what my friends just told me about the EthereumMax token!” and included the link to a page that was on the EthereumMax website with guidelines for buying EMAX tokens.
According to U.S. law, people who advocate for certain crypto securities or stocks are required to reveal not just that they are being paid for their efforts but also the amount they’re paid as well as the source of these payments. The SEC has warned famous people seeking to make a living in the cryptocurrency asset market to follow these guidelines and reveal how much they are paid for promoting crypto. The SEC has already slapped celebrities who have broken these laws which include DJ Khaled, Floyd Mayweather and Steven Seagal.
It was launched in May 2021. EthereumMax was not well-known to experts or crypto investors prior to Ms. Kardashian’s announcement. Although it’s in the Ethereum blockchain however, it is not associated to any of Ethereum’s developers, and has not revealed the names of of its own employees or its developers. Although it has a tiny share of the crypto market it has promised the possibility of a return of 3 percent on investment.
After a short increase in value after her. Kardashian’s Instagram post EthereumMax has dropped in value by about 98 percent from June 2021. The post by Ms. Kardashian, along with Floyd Mayweather and former basketball Paul Pierce, was sued in January 2022 by investors who filed an action class-action suit alleging that the celebs have made misleading or false statements regarding EthereumMax to manipulate the price and earn a profit. The class action suit disclosed the identities of EthereumMax’s founders Steve Gentile and Giovanni Perone and an SEC investigation is continuing.
The ongoing story of EthereumMax is an cautionary tale that ought to make crypto investors think twice whenever they encounter celebrities advertising cryptocurrency on social media or other platforms.
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