The Securities and Exchange Commission issued a press release on Monday detailing charges they had filed against Kim Kardashian for her promotion of a crypto asset security on social media without disclosure of how much she received for promoting the security offered and sold by EthereumMax.
The investigation by the SEC revealed that Kardashian was paid $250,000 to post about EthereumMax’s EMAX tokens on her Instagram account. The post contained a link to purchase the tokens and also contained instructions for EthereumMax’s potential investors. Kardashian’s post was found to have violated the anti-touting provision of federal securities laws.
Kardashian agreed to settle the charges without admitting or denying the accompanying claims. She will pay $1.26 million in penalties, disgorgement (in the form of the entire promotional payment), and interest, and has agreed to cooperate with the SEC’s continual investigation. Additionally, she will not be able to promote another crypto asset security using her platform for three years.
SEC Chair Gary Gensler said that the now-settled charges against Kardashian serve “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 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. Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information,” stated Gurbir S. Grewal, the SEC Division of Enforcement director.
The claims between Kim Kardashian and the SEC were settled on Monday.