Kim Kardashian has agreed to pay $1.26 million to settle charges brought against her for touting cryptocurrency on social media.
Executives at the U.S. Securities and Exchange Commission (SEC) announced on Monday that they had charged the reality star for touting EMAX tokens on Instagram and failing to disclose that she was paid for the promotion.
In June 2021, Kim promoted EMAX tokens, the crypto asset security being offered by EthereumMax, alongside a link to the company’s website and did not disclose that she was paid $250,000 for her post – a violation of federal securities laws.
Without admitting or denying the SEC’s findings, Kim has agreed to pay $1.26 million to settle the charges, cooperate with SEC’s ongoing investigation, and not promote any crypto asset securities for three years.
“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. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.
“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.”
The $1.26 million payment includes a $1 million penalty and $260,000 in disgorgement plus interest.
In her original post, the 41-year-old wrote, “ARE YOU INTO CRYPTO??? THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN.”
Kim, boxer Floyd Mayweather Jr. and former basketball player Paul Pierce were sued earlier this year by investors over their promotional posts for EthereumMax.
They were accused of artificially inflating the value of the asset.