Kim Kardashian is paying $1.26 million in a settlement agreement with the Securities and Exchange Commission amid charges that she unlawfully touted a cryptocurrency without disclosing she was being paid for the promotion.
Kardashian is paying the settlement without admitting to or denying the SEC’s findings, the agency said on Monday. She also agreed to not promote any crypto asset securities for three years.
The agency said Kardashian will cooperate in its ongoing investigation.
The fine is linked to a cryptocurrency called EthereumMax, or EMAX, which was pitched to investors as a disruptive new cryptocurrency. Kardashian was one of several celebrities, along with boxer Floyd Mayweather and former NBA star Paul Pierce, who used their fame to hype the crypto asset and who were the focus of a class-action lawsuit in January over their endorsements.
The SEC said Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens. Kardashian’s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.
“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,” Gurbir Grewal, director of the SEC’s division of enforcement, said in a prepared statement.
The SEC said Kardashian’s settlement includes about $260,000 in disgorgement, covering the amount she earned from promoting the cryptocurrency plus interest, as well as a $1 million penalty.
—With reporting by the Associated Press.
