Kim Kardashian has been punished by the top financial watchdog in the US for promoting a cryptocurrency on her Instagram account without revealing that she received payment for the advertisement.
Kardashian did not confirm or reject the Securities and Exchange Commission's allegations, but the S.E.C. said on Monday that she had agreed to pay a $1 million punishment.
Additionally, she will return $260,000, which includes her interest-bearing payout from the business.
The SEC head, Gary Gensler, stated that the case of Ms. Kardashian "also serves as a reminder to celebrities
and other groups that the law compels them to disclose to the public when and how much they are paid to encourage investment in securities."
Kardashian, who has almost 330 million Instagram followers, received a $250,000 payment to promote EMAX tokens, a cryptocurrency issued by EthereumMax.
Her article also "offered directions for potential investors to acquire EMAX tokens," which is against a federal securities law's "anti-touting clause," according to officials.
These Companies have spent millions of dollars on marketing as cryptocurrency's popularity has soared.
Many of them have employed celebrities as spokespersons, such as actor Matt Damon and comedian Larry David, to market their goods.
However, several of them have come under fire for promoting digital currencies when the value of Bitcoin and other such currencies fell.