Kim Kardashian agrees to pay $1.26 million to the SEC to resolve crypto charges
Kim Kardashian “agreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate with,” investigations, the U.S. Securities and Exchange Commission (SEC) said
Kim Kardashian has agreed to settle SEC allegations for “promoting on social media a crypto asset security issued and sold by EthereumMax without reporting the cash she received for the promotion.”
In a formal release issued on Monday, the SEC noted that The Kardashians star, 41, “agreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate with the Commission’s ongoing investigation” without admitting or denying the SEC’s findings.
Kardashian broke protocol by failing to disclose that she was paid a quarter-million dollars to make an Instagram post promoting EthereumMax’s EMAX tokens, a crypto asset security product, along with a link to the company’s website for would-be purchasers.
“Ms. Kardashian is pleased to have resolved this matter with the SEC,” the SKIMS founder’s lawyer says in a statement obtained by PEOPLE. “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 lawyer adds. “The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits.”
SEC Chair Gary Gensler said in a statement that Kardashian’s 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.”
“We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals,” Gensler continued.
He concluded, “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.”
According to Business Insider, the advertisement appeared on Kardashian’s Instagram Story in June 2021 and stated, “Are you guys into crypto????… This is not financial advice, but rather a summary of what my friends have recently told me regarding the Ethereum Max token!”
“A few minutes ago, Ethereum Max burnt 400 trillion tokens- essentially half of their admin wallet giving back to the entire E-Max community,” she reportedly said at the time.
The SEC stated in a Monday release that the reality star “violated the anti-touting provision of the federal securities laws,” and that her $1.26 agreed-upon payment includes “approximately $260,000 in disgorgement, which represents her promotional payment, plus prejudgment interest, and a $1,000,000 penalty.”
“Kardashian also agreed to not promote any crypto asset securities for three years,” they said.