American socialite Kim Kardashian will pay $1.26 million in penalties for her involvement in the promotion of a cryptocurrency scheme called EthereumMax (EMAX).
The United States Securities and Exchange Commission announced the charges against Kardashian on October 3 for ‘touting on social media a crypto asset security offered and sold by EthereumMax’ without disclosing the payment received for her promotional involvement.
Kardashian has agreed to settle the charges and pay $1.26 million in penalties, disgorgement and interest and is set to cooperate with further investigations by the SEC into the EthereumMax project.
The announcement noted that Kardashian had failed to disclose a $250,000 payment she had received to publish a post on her Instagram profile promoting EMAX tokens with a link to the project’s website.
The order by the SEC finds that Kardashian violated the anti-touting provision of federal securities laws. This has been the case with other prominent cryptocurrency securities violations involving the SEC in the past.
Kardashian neither admitted or denied the SEC’s findings but agreed to settle the charges. This was broken down into $260,000 in disgorgement as well as a $1 million penalty. Kardashian has also agreed to not promote any cryptocurrency assets until 2025.
Today @SECGov, we charged Kim Kardashian for unlawfully touting a crypto security.
This case is a reminder that, when celebrities / influencers endorse investment opps, including crypto asset securities, it doesn’t mean those investment products are right for all investors.
— Gary Gensler (@GaryGensler) October 3, 2022
SEC chairman Gary Gensler also used the order to inform the general public to do their due diligence when investing in cryptocurrency assets, while reminding celebrities and influencers of their obligation to disclose payments relating to promotions of securities.
“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. We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
Kardashian’s legal team also filed a motion to set aside a class-action complaint aimed at the businesswoman and other American celebrities in August 2022. Kardashian and a handful of other prominent American social media influencers were served with a class-action…
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