Kim Kardashian has agreed to pay a $1.26 million fine after federal regulators said she unlawfully promoted a cryptocurrency on Instagram without disclosing how much she was paid for the promotion, Securities and Exchange Commission officials announced Monday morning.
Federal regulators said the reality TV star failed to disclose she was paid $250,000 to publish an Instagram post about EMAX tokens, a crypto asset offered by EthereumMax, the SEC said in a statement.
She shared the post in June last year, asking her millions of followers: “ARE YOU INTO CRYPTO??? THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN.”
The post included a link to EthereumMax’s website, which had instructions for potential investors to purchase EMAX tokens, the SEC statement said.
In doing so, she violated the anti-touting provision of federal securities law, it said.
Kardashian agreed to pay $1.26 million in penalties, which includes her promotional payment, and to cooperate with the commission's investigation “without admitting or denying the SEC’s findings,” the statement said.
She also agreed not to promote any crypto assets for three years, officials 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,” SEC Chair Gary Gensler said. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
An attorney for Kardashian said she 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,” her lawyer said. “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.”