Kim Kardashian has agreed to pay $1.26 million (€1.29 million) to settle charges against her that she promoted a cryptocurrency without disclosing she had been paid to do so.
The US Securities and Exchange Commission, a federal agency which enforces the law against market manipulation, said the reality TV star failed to disclose that she was paid to publish a post on her Instagram account about EMAX tokens.
Kardashian had been paid $250,000 (over €255,000) to do so.
The SEC said on Monday that Kardashian had agreed to settle the charges and cooperate with its investigation.
The crypto industry is under increasing scrutiny from regulators worldwide, after months of turmoil that saw prices plunge and companies fold, with fortunes and jobs disappearing overnight.
‘Unlawfully touting crypto security’
The case centres on an Instagram post in which Kardashian linked to the Ethereum Max website, which provided instructions for potential investors to purchase EMAX tokens.
She made the post back in June 2021, after EMAX hit an all-time high of $0.00000092 per coin. At the time of writing it is currently trading at around $0.000000004245.
While she did put a #AD in her post to signify it was an advertisement, she did not disclose that she had been paid a large sum of money to post it. The SEC accused her in a statement of “unlawfully touting a crypto security”.
“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,” SEC Chair Gary Gensler said in a statement.
“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,” Gensler added.
Kardashian has agreed to not promote any crypto asset securities for three years.
“Ms. Kardashian is pleased to have resolved this matter with the SEC,” a lawyer for Kardashian said in a statement.
“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”.
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