Celebrity Kim Kardashian has agreed to pay a huge fine after being accused of a misleading Instagram post promoting crypto to her 225 million followers.
The $US1.26 million ($1.96 million) fine related to charges that she failed to disclose she had been paid $US250,000 ($387,986) to publish a post about EMAX tokens, a crypto asset security being offered by EthereumMax.
Kardashian’s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.
She wrote in June: “Are you guys into crypto? This is not financial advice but sharing what my friends told me about the ethereum max token!”
The hashtags included #ad, #emax and #disrupthistory.
Today @SECGov, we charged Kim Kardashian for unlawfully touting a crypto security.
This case is a reminder that, when celebrities / influencers endorse investment opps, including crypto asset securities, it doesn’t mean those investment products are right for all investors.
— Gary Gensler (@GaryGensler) October 3, 2022
The Securities and Exchange Commission said the reality TV star and entrepreneur had agreed to co-operate with its ongoing investigation.
“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 Grewal, director of the SEC’s division of enforcement, said in a prepared statement.
Kim Kardashian has agreed to not promote any crypto asset securities for three years.
“Ms Kardashian is pleased to have resolved this matter with the SEC. Kardashian fully co-operated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter,” a lawyer for Ms Kardashian said in a statement.
“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.”
KIm Kardashian failed to disclose she had been paid for a crypto post. Photo: Getty
Ms Kardashian, boxer Floyd Mayweather Jr, basketball player Paul Pierce and EthereumMax’s creators were sued by investors in January.
The legal action alleged they had collaborated to “misleadingly promote and sell” the cryptocurrency in a “pump and dump” scheme.
Although Kim Kardashian is well known for reality TV, currently appearing on The Kardashians, she is also a successful businesswoman.
Her brands include SKIMS, which has shapewear, loungewear and other products, and a skincare line called SKKN.
Cryptocurrency is facing increasing attention from US Congress.
The latest bipartisan proposal would hand the regulatory authority over Bitcoin and Ether to the Commodities Futures Trading Commission.
Bills proposed by other members of Congress and consumer advocates have suggested giving the authority to the Securities and Exchange Commission.
This year, crypto investors have seen prices plunge and companies crater with fortunes and jobs disappearing overnight, and some firms have been accused by federal regulators of running an illegal securities exchange.
-with AAP
