The Securities and Exchange Commission (SEC) announced charges Monday against billionaire socialite Kim Kardashian.
The charges stem from Kardashian’s allegedly failure to disclose the amount she was paid to promote a cryptocurrency asset security offered and sold by EthereumMax (EMAX), according to a press release from the SEC. The release states that Kardashian has agreed to cooperate with the SEC’s ongoing investigation and to settle the charges against her, paying $1.26 million in penalties, interest and disgorgement.
Kardashian did not disclose that she was paid $250,000 to post about EMAX tokens on her Instagram account, which included a link to the EthereumMax site, the SEC press release claimed.
Kim Kardashian Launches Private Equity Firm In Latest Business Venture https://t.co/5RrRztZnyI
— Daily Caller (@DailyCaller) September 9, 2022
“ARE YOU INTO CRYPTO??? THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN,” Kardashian wrote to her 330 million Instagram followers in June 2021 in a post the also included “#ad,” CNBC reported. The agreement Kardashian reached with the SEC included repaying the $250,000 she was paid plus $10,000 in interest, as well as a $1 million penalty, the outlet noted.
“This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn’t mean that those investment products are right for all investors,” SEC chair Gary Gensler wrote in the press release. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
In posting about EMAX tokens on her social media, Kardashian violated the anti-touting provision of securities law, the press release noted. The socialite neither admitted nor denied the SEC findings against her but agreed to pay the settlement and not promote any crypto asset securities for three years, the SEC reported.
“Kardashian fully cooperated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter. She wanted to get this matter behind her to avoid a protracted dispute. The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits,” an attorney for Kardashian said in a statement shared by CNBC. (RELATED: Kim Kardashian Triggers Backlash After She Says Women In Business Need To Work Harder)
The SEC shared warnings about celebrity-backed stocks and investments in 2017, noting that the endorsements may be unlawful if they fail to disclose how much the celebrities were paid to make the endorsement.