The internet went crazy when Kim Kardashian’s $1.26 million fine was reported for an ‘unethical’ Instagram post. The mega influencer failed to disclose that she had been paid $250,000 to promote the cryptocurrency on her social media, which resulted in her being charged to settle with the US Securities and Exchange Commission.
The influencer took to Instagram to promote the EMAX tokens without communicating that it was an advertisement. Her post contained a link to the EthereumMax website, which had all the directions for potential investors.
Gurbir Grewal, the Director of the SEC’s division of enforcement, explained, “The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion.”
While Kim’s post did include the hashtag ‘#AD’, it did not abide by the other regulations under SEC’s disclosure requirements. The laws differ from country to country. Having said that, it is unethical for influencers to omit that a post about a product is an ad or paid promotion.
The Kardashian sister will not be promoting crypto assets for the next three years as a result of this incident. Kim is not only a TV star and celebrity but also a successful entrepreneur. The star recently released her podcast ‘The System’ on spotify.
What does this mean to influencers out there?
By law, social media influencers are required to mention when they participate in paid sponsorships and advertisements. This informs followers that the influencer has received compensation for promoting a product or service.
In the UAE, influencers require a license from the National Media Council to participate in paid promotional activities. It is designed to regulate the influencers’ activity in the region and protect the interests of the general public.
All the influencers in the region must abide by the laws the National Media Council placed to ensure that their followers are aware of the content they are consuming. You can find everything you need to know about the NMC license here.
Are you an influencer posting an advertisement or paid promotion on your social media? Make sure to go through all the rules and regulations to avoid fines and penalties.
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