The Securities and Exchange Commission fined Kim Kardashian $1.26 million for promoting EthereumMax on Instagram, a crypto asset.
Kardashian was charged with failing to disclose that she was paid $250,000 to publish her Instagram post. She also agreed to cooperate with the SEC’s investigation in addition to paying the fine.
“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. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
A three-year ban on promoting crypto securities was also agreed upon by Kardashian.
“Ms. Kardashian is pleased to have resolved this matter with the SEC,” said a statement from her attorneys. “Ms. Kardashian has fully cooperated with the SEC from the beginning and remains willing to assist the SEC in any way she can. In order to avoid a protracted dispute, she wanted to end this matter quickly. As a result of the agreement she reached with the SEC, she can move forward with her diverse business interests.”
Kardashian violated the anti-touting provision of federal securities laws, according to the SEC. SEC findings weren’t admitted or denied by Kardashian in her agreement.
As part of the settlement, she must pay a $1 million fine and forfeit the $250,000 payment she received, plus interest.
According to Gensler, celebrities don’t necessarily have the same incentives as you. “Investors shouldn’t confuse celebrity skills with the very different skills needed to offer appropriate investment advice.”
According to Charles Whitehead, professor at Cornell Law School, the SEC targeted Kardashian to send a message to other influencers who might promote crypto currencies or other investment assets. A “shot across the bow” to celebrity crypto endorsers, he said.
For more on this story, please consider these sources:
- SEC Charges Kim Kardashian for Unlawfully Touting Crypto Security SEC.gov
- Kim Kardashian charged by SEC, agrees to pay $1.3 million fine CNN
- SEC Chair Gary Gensler breaks down charges against Kim Kardashian over a crypto promo CNBC Television
- Kim Kardashian to pay $1.26M to settle SEC charges over Instagram crypto promotion Yahoo Entertainment
- Kim Kardashian forced to fork over $1.2M to SEC for unlawfully promoting EMAX tokens #shorts Fox Business