Global influencer, celebrity, and entrepreneur Kim Kardashian has settled charges with the Securities and Exchange Commission (SEC) regarding allegations of promoting a “crypto asset security” without revealing she was paid for touting the digital asset on social media. The promotion took place in June of 2021.
According to the SEC’s complaint, Kardashian has agreed to pay a $1.26 million penalty which includes disgorgement, and interest, while agreeing to cooperate with the SEC’s ongoing investigation. Kardashian also agreed to not promote any digital asset securities for three years. Kardashian accepted the settlement without admitting nor denying any of the SEC’s findings.
Kardashian is not the first celebrity to be caught up in an SEC enforcement action for promoting crypto assets but she is the highest profile individual to be punished for leveraging her social media prominence to promote the crypto offering.
The SEC states that Kardashian promoted EMAX tokens issued by EthereumMax and received a $250,000 payment to post about the EMAX offering on her Instagram account.
SEC Chairman Gary Gensler said the case is a reminder that when influencers endorse of investment opportunity it does not mean it is right for all investors:
“We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals. Ms. Kardashian’s case also serves 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.”
Under the law, any individual the promotes a security must disclose the nature and source of the compensation, explained Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.
“Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”
