Key Headlines:
- Kim Kardashian has agreed to pay more than $1 million usd to settle charges from the SEC for failing to disclose a payment she received for promoting a crypto asset on Instagram.
- She also agreed not to promote crypto assets for three years.
- She had already gotten criticism from regulators and investors over the post in June 2021.
In a press release, the SEC stated in its investigation that they found Kardashian had received $250,000 to promote EthereumMax cryptocurrency on her Instagram account, which she failed to disclose. As part of the settlement, Kim will pay $1.26 million in penalties, disgorgement, and interest- plus she is cooperating with the ongoing investigation.
Aside from the financial penalty, Kardashian has agreed not to promote any crypto assets for three years. The press release notes that Kardashian has neither admitted to nor denied the findings of the SEC’s investigation.
SEC Chair Gary Gensler stated, “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.”
“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.”
With the decline in the cryptocurrency market since the start of this year, celebrities are coming under scrutiny for previously promoting them. Despite their increasing popularity, crypto and NFT tokens remain highly volatile and unregulated and many argue that celebrity promotions expose them to people who may be unaware of the potential risks.
Read the SEC’s settlement order here.
