Kim Kardashian has been charged by the Security and Exchange Commission for promoting a crypto asset. The reality TV star promoted EthereumMax without disclosing reimbursement, according to SEC.
The Securities and Exchange Commission said in a statement that charges were made against Kim Kardashian for touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion.
Kardashian Promoted EMAX Tokens On Her Instagram Post
The SEC's order finds that Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens. Kardashian's post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.
Kardashian Didn't Disclose reimbursement She Received From EthereumMax
SEC Chair Gary Gensler stated that 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."
Kardashian To Not Promote Crypto Asset Securities For Three Years
Gensler also underlined that the 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.
According to federal securities laws, 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.
Kardashian Agreed To Pay The $1.26 million
The SEC's order finds that Kardashian violated the anti-touting provision of the federal securities laws. Without admitting or denying the SEC's findings, Kardashian agreed to pay the $1.26 million, including approximately $260,000 in disgorgement, which represents her promotional payment, plus prejudgment interest, and a $1,000,000 penalty.
Kardashian also agreed to not promote any crypto asset securities for three years.