Kim Kardashian’s crypto blunder has gotten her in deep water with federal authorities.
The reality TV actress and influencer has settled SEC accusations that she failed to disclose a payment she received for promoting a cryptocurrency on her Instagram page, the agency revealed Monday morning.
“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,” Gary Gensler, chairman of the SEC, said in a news release.
According to the SEC, Kardashian, who is allegedly worth $1.8 billion, agreed to pay $1.26 million to settle the accusations stemming from a promotion on Meta’s Instagram for EthereumMax’s crypto asset. According to the regulator, she will also comply with an ongoing investigation and has agreed not to market cryptocurrency securities for three years.
The SEC stated that Kardashian, who has developed a media and lifestyle empire, neither confirmed nor rejected the regulator’s conclusions.
Kardashian’s lawyer stated that she is relieved the situation has been concluded.
“Kardashian fully cooperated with the SEC from the beginning and 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,” the statement said.
Kardashian has already been under regulatory scrutiny for her EthereumMax promo video, which she shared on Instagram in June of last year. “ARE YOU INTO CRYPTO???” she asked her almost 250 million Instagram followers. THIS IS NOT FINANCIAL ADVICE, BUT I WOULD LIKE TO SHARE WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN.”
Investors sued her, former NBA player Paul Pierce, and renowned boxer Floyd Mayweather Jr. earlier this year for their EthereumMax promotions, charging them of inflating the asset’s value.
The SEC charged Kardashian on Monday with failing to register that she was paid $250,000 by EthereumMax, via an intermediary, to write a post regarding EMAX tokens, a crypto asset issued by EthereumMax. The tweet, which contained the hashtag “#ad,” also provided a link to the EthereumMax website, which instructs visitors on how to purchase the tokens, according to the regulator.
According to the SEC, her omission to report the payment constituted a violation of federal securities laws. The agency claimed that she agreed to pay $260,000, which included the amount she got plus interest and the $1 million penalty.
“Congress passed a law many decades ago called the Securities Act, and it was to protect the public,” Gensler said on Monday morning. “Part of that law said that if you tout a stock you have to disclose if you’re getting paid.”