- Kardashian “agreed to settle the charges, pay $1.26 million in fines, restitution, and interest, and cooperate with the Commission’s ongoing investigation.”
- Kim also committed to stop promoting any cryptocurrency-related securities for three years.
According to the Securities and Exchange Commission, Kim Kardashian agreed to pay $1.26 million to resolve allegations that she promoted a cryptocurrency asset security without reporting the compensation she got for the marketing.
According to a statement from the SEC, socialite and reality television star Kardashian did not reveal that she received $250,000 from EthereumMax to promote on her Instagram account about the crypto asset security known as EMAX tokens.
According to the SEC’s ruling, Kardashian broke the federal securities laws’ anti-touting clause. This has historically been true of other well-known bitcoin securities breaches with the SEC.
According to the SEC, as part of the settlement, Kardashian also consented to refrain for three years from promoting any securities backed by crypto assets.
Kardashian’s tweet included a link to the EthereumMax website, which gave directions on how to buy EMAX coins for potential investors.
As SEC Chair Gary Gensler noted, “This case is a reminder that just because celebrities or influencers support investment possibilities, including crypto-asset securities, doesn’t guarantee that those investment products are suitable for all investors.”
The SEC Chair went on to say that under US law, individuals who promote a particular stock or digital asset must declare not only the fact that they get payments but also the value, the source, and the type of those payments.
In an interview with CNBC, Gensler stated, “This was basically to protect the investing public when anyone is praising that stock, whether it’s a celebrity or an influencer or the light, and that’s at the core of what this isn’t.”
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement also explains Investors have a right to know if the publicity around security is objective as well as unbiased, and Ms. Kardashian did not provide this information.
The Enforcement Division’s Crypto Assets and Cyber Unit’s Jon A. Daniels, Alison R. Levine, and Pamela Sawhney, as well as the New York Regional Office’s Kerri Palen, Lisa Knoop, and Victor Suthammanont are conducting the SEC’s ongoing investigation. Mark R. Sylvester of the Crypto Assets and Cyber Unit and Carolyn Welshhans oversaw the case.