Kim Kardashian charged by SEC over crypto post
The Securities and Exchange Commission on Monday charged reality star Kim Kardashian over a post she made promoting a crypto asset security sold by EthereumMax "without disclosing the payment she received for the promotion."
Kardashian will pay $1.26 million to settle the civil charges, the SEC said in its announcement.
The SEC alleged that Kardashian failed to disclose that she received $250,000 to publish a post on her Instagram account about EMAX tokens, the crypto asset security being offered by EthereumMax.
"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," he added.
The $1.26 million settlement equals the payment Kardashian received for the promotion as well as a $1 million penalty, the SEC said. Kardashian also agreed to forego the promotion of any crypto asset securities for three years, the agency added.
"Ms. Kardashian is pleased to have resolved this matter with the SEC," Kardashian’s lawyer told ABC News 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 statement continued. "The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits."
Kardashian is among a number of celebrities named in a class-action lawsuit filed last January in a California U.S. District Court over allegations from investors that they suffered losses after the celebrities promoted the crypto coin. That court case is ongoing.
The plaintiffs invested money after “viewing numerous celebrity endorsements of EMAX,” the lawsuit said.
Kardashian filed a motion to dismiss the lawsuit last month, arguing that none of the investors claimed to have seen her promotional Instagram posts.
The value of an EthereumMax coin fell 1.75% on Monday.
"We might enjoy watching a celebrity playing on a basketball court, starring in a reality TV show or movie or performing to a large crowd at a stadium show," Gensler said in a video published by the SEC on Monday.
"We shouldn’t confuse those skills, though, with the very different skills needed to offer appropriate investment advice," he added.
