The world-famous actress and influencer Kim Kardashian has to pay a fine of 1.26 million US dollars for an Instagram post. She had concealed the fact that she had received a handsome fee for crypto advertising. Now she is no longer allowed to advertise.
With an estimated fortune of 1.8 billion US dollars, Kim Kardashian is one of the richest people in the world. The former reality show contestant has become an influential entrepreneur and influencer.
On her Instagram account alone, Kim Kardashian gathers over 330 million fans around the globe. The 41-year-old also knows that this enormous reach can be very well converted into money. That’s why she regularly advertises companies and products on Instagram.
1.26 million US dollar fine for Kim Kardashian because of Instagram post
Such cooperation is now literally falling on Kardashian’s feet. The US Securities and Exchange Commission (SEC) has sentenced her to a total fine of 1.26 million US dollars for unauthorized and illegal crypto advertising.
This is according to a related press release. Specifically, the influencer had advertised a crypto asset called “EthereumMax”. The problem with this: the corresponding Instagram post was not marked as advertising.
Influencers must label crypto ads and bonuses
The SEC stipulates that influencers:in the U.S. must indicate in promotional social media posts that it is a paid advertisement. This means that they must explicitly inform potential investors that they are receiving money for the promotion.
SEC Chief Gary Gensler also summarizes this once again in his ruling:
This case is a reminder that celebrities and influencers are required by law to disclose when they are promoting investment opportunities and have been paid to do so. They must disclose the amount of payment and the advertiser.
The Securities and Exchange Commission is concerned with showing small investors in as much detail, as quickly and as clearly as possible how high the risk of an investment is, in order to protect their financial resources.
Three-year advertising ban for Kim Kardashian
Because Kim Kardashian knowingly violated some of these legal templates, she must now pay a fine of $1.26 million. The amount is made up of the fee in the amount of 250,000 US dollars, the accruing penalty interest as well as the fine of over one million US dollars.
But that’s not all: the influencer is not allowed to do any advertising for cryptocurrencies or products from the crypto sector for the next three years. Thus, the indirect fine is likely to be even significantly higher.
Spain: Influencers must register crypto advertising
Only at the beginning of the year, the Spanish government had decided by law that major influencers must register their advertising campaigns for cryptocurrencies in advance.
The ten-day written lead time is intended to ensure that any price manipulation by influencers with at least 100,000 fans is made much more difficult.
In theory, influencers can buy the advertised cryptocurrency before a promotion and sell it for a profit after the promotion. Under this, in turn, unfortunately, the small investor, because the prices fall sharply after large sales.