Kim Kardashian has been charged with “unlawfully touting” a “crypto security,” as stated by the U.S. Securities and Exchange Commission (SEC) on Monday morning. The SEC claims that Kardashian broke the regulations by not disclosing that she was compensated to promote a “crypto asset security offered and sold by EthereumMax.”
Million Dollar Mistake
According to the SEC, Kardashian, who has a net worth of $1.8 billion, settled charges by paying $1.26 million for promoting EthereumMax’s crypto asset on Meta’s Instagram. The regulator also noted that she has committed not to advertise cryptocurrency securities for the next three years and that she would assist with any continuing investigations.
The SEC noted that Kardashian, who has amassed a media and lifestyle empire, neither confirmed nor refuted the findings of the regulator. The attorney for Kardashian says in a statement she is relieved the case is over.
Since posting an Instagram ad for EthereumMax in June of last year, Kardashian has been under scrutiny from regulators. The Instagram post in question said:
“ARE YOU INTO CRYPTO??? THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN.”
Cracking down on influencers
Earlier this year, investors sued her, along with former NBA player Paul Pierce and boxing icon Floyd Mayweather Jr. for promoting EthereumMax and thereby inflating the asset’s value.
On Monday, the SEC alleged that Kardashian had failed to disclose that she had been paid $250,000 by EthereumMax (through an intermediary) to write about EMAX tokens, a cryptocurrency issued by EthereumMax. The regulator noted that the post, which used the hashtag “#ad,” directed visitors to the EthereumMax website, where they could learn more about purchasing the tokens.
According to the SEC, she broke federal securities laws by failing to report the payment. In addition to the $1 million fine, she also agreed to pay the agency $260,000, which includes the money she was already paid plus interest.
