Kim Kardashian is in trouble over an Instagram post promoting cryptocurrency assets. The US Security and Exchange Commission on Monday slapped charges on the celebrity for non-disclosure of payment received against the promo deal.
The SEC said in a statement on Monday that the reality TV star and entrepreneur has agreed to cooperate with its ongoing investigation and will pay $1.26 million in penalties, disgorgement and interest.
Kim Kardashian fined over crypto promotion
The SEC said Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens, a crypto asset security being offered by EthereumMax. Her post also contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.
“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,” Gurbir Grewal, director of the SEC’s division of enforcement, said in a statement.
Kardashian has agreed to not promote any crypto asset securities for three years.
“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,” a lawyer for Kardashian said in an email.
Gary Gensler, who chairs the SEC, called the case a "reminder" celebrity endorsement did not necessarily make a product worth investing in.
"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," he said.
Later, in a YouTube video about crypto investment, he added: "Celebrity endorsements... don't mean that an investment product is right for you or even, frankly, that it's legitimate.
"Even if a celebrity endorsement is genuine, each investment has its own risk and opportunities.
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