Kim Kardashian Settles for $1.26 Million With SEC Over Instagram Cryptocurrency Promotion
Kim Kardashian Settles for $1.26 Million With SEC Over Instagram Cryptocurrency Promotion
Kim Kardashian has agreed to pay $1.26 million to settle Securities and Exchange Commission charges for promoting a cryptocurrency on Instagram without revealing that she was paid $250,000 to do so.
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The SEC said Monday that the reality TV star and entrepreneur has agreed to cooperate with its ongoing investigation.
The SEC said Kardashian did not disclose that she had been paid to post an article on her Instagram account about EMAX tokens, a crypto asset security offered by EthereumMax.
Kardashian’s Instagram post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.
“Federal securities laws clearly state that any celebrity or other person 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 enforcement division, said in a prepared statement.
Kardashian has agreed not to promote any crypto asset securities for three years.
“Ms. Kardashian is pleased to have resolved this matter with the SEC. Kardashian has cooperated fully with the SEC from the outset and she remains willing to do whatever she can to assist the SEC in this matter. She wanted to put this case behind her to avoid a protracted dispute. The agreement she reached with the SEC allows her to do that so she can move forward with her many different business endeavors,” an attorney for Kardashian said in an email.
While Kardashian is well known for reality TV, currently appearing on “The Kardashians” on Hulu, she is also a successful businesswoman. Its brands include SKIMS, which offers shapewear, loungewear and other products, and a skincare line called SKKN.
For anyone trying to promote a product, Kardashian provides a huge bullhorn with 330 million Instagram followers.
Cryptocurrency is attracting more and more attention from Congress. A bipartisan proposal last month would hand over regulatory authority over Bitcoin and Ether, two popular cryptocurrencies, to the Commodities Futures Trading Commission after wild swings in crypto valuations, dozens of scams and hundreds of billions of dollars won and lost.
Kardashian isn’t the first celebrity to come to the attention of regulators for her involvement in cryptocurrency. In 2018, the agency settled charges against professional boxer Floyd Mayweather Jr. and music producer DJ Khaled for failing to disclose payments they received for promoting digital currency investments.
This year, crypto investors have seen prices plunge and businesses collapse with fortunes and jobs disappearing overnight, and some companies have been accused by federal regulators of running an illegal stock exchange.
