Kim Kardashian is paying the Securities and Exchange Commission a large penalty for “touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion.”
A press release for the SEC stated that the SKIMS founder—”without admitting or denying the SEC’s findings”—agreed to settle the charges and pay the penalties, disgorgement, and interest amounting to $1.26 million.
The reality star’s lawyer told E! News, “Ms. Kardashian is pleased to have resolved this matter with the SEC. Kardashian fully cooperated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter. 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.”
The SEC’s order discovered that the business mogul failed to disclose the payment of $250,000 which she received from promoting EMAX tokens on her Instagram. The tokens are the crypto asset security offered by EthereumMax.
According to the press release, SEC Chair Gary Gensler said, “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.”
He added, “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.”
SEC’s Division of Enforcement director, Gurbir S. Grewal, also explained Kim’s case. He said, “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. Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”
In addition to paying SEC, Kim also agreed that she won’t be promoting crypto asset securities for three years.