Kim Kardashian has been charged for being unlawful.
On Monday, the Securities and Exchange Commission (SEC) revealed charges against the businesswoman for a social media endorsement of “a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion.”
Kardashian reportedly agreed to settle the charges — “pay $1.26 million in penalties, disgorgement and interest, while also cooperating with the SEC’s ongoing investigation,” according to The Hollywood Reporter.
The government agency’s order found that “Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens, the crypto asset security being offered by EthereumMax.” Her sponsored post included a link to the EthereumMax website to further provide instructions on how to purchase EMAX tokens for potential investors.
In a statement by the SEC, the commission detailed the amounted charges against the Skims mogul.
“Kardashian violated the anti-touting provision of the federal securities laws. Without admitting or denying the SEC’s findings, Kardashian agreed to pay the aforementioned $1.26 million, including approximately $260,000 in disgorgement, which represents her promotional payment, plus prejudgment interest, and a $1,000,000 penalty,” the commission outlined.
They added that Kardashian has also agreed to not promote any crypto asset securities for three years.
“Ms. 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 a statement.
The SEC circled back to a previous statement which urged others to be cautious in regards to celebrities giving their stamp of approval.
“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,” said SEC chair Gary Gensler. “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,” he added.
The director of the SEC’s division of enforcement, Gurbir Grewal, also provided a statement saying, “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. Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”
In a new video by the SEC, Gensler sits in front of a camera warning investors not to make investment decisions based solely on the recommendations of a celebrity of influencer.