Kim Kardashian has reached a settlement with the SEC for promoting cryptocurrency without disclosing she was paid to do so. The influencer will pay $1.26 million.
According to the SEC’s order, Kardashian didn’t inform them that she was paid $250,000 to promote EMAX tokens, the cryptocurrency offered by EthereumMax, on her Instagram account. She has been touting the cryptocurrency on her page for more than a year.
“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,” Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, said in a statement. “Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”
A lawyer for Kardashian said in a statement to media that she was “pleased to have resolved this matter.”
“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,” the statement said. “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.”
SEC Chair Gary Gensler said that Kardashian’s promotion is a “reminder” to celebrities that they must follow disclosure laws like anyone else.
“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,” Gensler said in a statement. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
The SEC’s order found that Kardashian “violated the anti-touting provision of the federal securities laws.” The commission’s report noted that while Kardashian didn’t confirm or deny their findings, but agreed to pay the fines. The $1.26 million is made up of roughly $260,000 in disgorgement, making up for the money she received for the post, plus prejudgment interest, and a $1,000,000 penalty. Kardashian also agreed to not promote any crypto asset securities for three years.
