The Securities and Exchange Commission announced charges against Kim Kardashian for promoting an EthereumMax crypto asset security on her Instagram account without disclosing that she received a $250K payment for the plug.
She agreed to settle the charges, paying $1.26 million in penalties and cooperating with the SEC's ongoing investigation.
Kardashian posted about EMAX tokens and published a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.
"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 in a statement. "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."
The SEC found that Kardashian violated the anti-touting provision of the federal securities laws. Without admitting or denying the SEC's findings, her payment breaks down as $260,000 in disgorgement, which represents her promotional payment, plus prejudgment interest and a $1M fine.
Kardashian also agreed not to promote any crypto asset securities for three years.