The US government announced today that celebrity Kim Kardashian will pay more than $1 million to settle a case involving cryptocurrency. The Securities and Exchange Commission said in a news release that Kardashian will pay $1.26 million in penalties and other fees over claims that she used her massive social media influence to hype a crypto asset security from EthereumMax without telling her fans that she was being paid to promote it.
Kardashian did not admit or deny any of the SEC’s claims and is paying the $1.26 million to settle the case. She also agreed to not promote anything related to crypto for three years.
Today we announced charges against Kim Kardashian for promoting a crypto security offered by EthereumMax without disclosing the payment she received for the promotion.
Kardashian agreed to settle the charges, pay $1.26 million, and cooperate with the investigation.— U.S. Securities and Exchange Commission (@SECGov) October 3, 2022
The SEC said Kardashian was paid $250,000 for an Instagram post publicizing EMAX tokens without properly disclosing that she was being paid for it. Kardashian has more than 330 million followers on Instagram, so her reach is genuinely massive.
SEC’s Gary Gensler said this case should be a reminder to people that they should do their own research. “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,” Gensler said.
Gensler added: “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.”
Federal securities laws state that anyone who promotes a crypto asset security needs to disclose the “nature, source, and amount of compensation they received” for that promotion.
“Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information,” SEC Enforcement boss Gurbir S. Grewal said.
Kardashian has her own video game, Kim Kardashian: Hollywood, which is developed by GluMobile. EA acquired the company for more than $2 billion in 2021 because mobile games are bigger than console and PC titles.
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