Kim Kardashian charged with unlawful promotion of a crypto asset
Kardashian did not disclose that she was paid $250,000 for an Instagram post promoting EMAX tokens; she will now pay $1.26 million in penalties as part of a settlement with the government.
Kim Kardashian. Photo by Dimitrios Kambouris/Getty Images for The Met Museum/Vogue
The Security and Exchanges Commission (SEC) has charged Kim Kardashian with "unlawfully touting crypto security." In June 2021, Kardashian shared an Instagram post promoting a crypto security asset created by EtheriumMax called "EMAX Tokens" and did not disclose that she was paid $250,000 for the post. Kardashian and the government have agreed to settle the charges – she will pay a $1.26 million fine and co-operate with an ongoing investigation as part of the terms.
SEC Chair Gary Gensler said in a statement: "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. We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals"
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, added: "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."
The settlement does not represent an admission of guilt or a denial of the charges on Kardashian's part, according to the press release. The $1.26 million figure includes her EtheriumMax payment of $260,000 plus $1 million in penalties and a ban from promoting crypto asset securities for three years.
Kardashian's lawyer confirmed the settlement in a statement to CNBC and welcomed the resolution. “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. 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.