Kim Kardashian has agreed to pay $1.26 million to settle charges brought by the Securities and Exchange Commission, which reported that she unlawfully promoted a cryptocurrency over Instagram in June of last year.
GoldenNewsNg reports that the SEC said the reality TV superstar and celebrity influencer endorsed EthereumMax’s crypto token for $250,000 last year without disclosing the payment she received for the promotion, violating the anti-touting provision of the federal securities law.
The settlement includes $260,000 in disgorgement and interest and $1 million in penalties. Additionally, Kardashian agreed to to not promote any crypto asset securities for three years and will cooperate with the U.S. regulator’s ongoing investigation.
“This is not financial advice but sharing what my friends just told me about the ethereum max token,” Kardashian’s now infamous June 2021 post which included “#AD” stated.
She agreed to the settlement without admitting to or denying SEC’s findings.
“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,” said SEC Chair Gary Gensler in a statement released by the agency on the matter.
Last year during crypto’s bull run, numerous celebrities increased the hype around digital assets by endorsing various crypto tokens on their social media platforms — which can have major reach.
For instance, Kardashian’s Instagram account is ranked as the platform’s 9th most influential account worldwide, according to Hypeauditor.com. Her clothing business SKIMS — estimated to be worth of $3.2 billion — is also the second-highest valued celebrity-owned business, according to a recent report by London-headquartered Investing app, Invezz.
“Ms. Kardashian’s case also serves as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities,” Gensler said in the statement.
