Kardashian failed to disclose her sponsorship for the claim.
Back in June of 2021, celebrity socialite Kim Kardashian made a post to her personal Instagram account touting the security of cryptocurrencies, specifically the currency EthereumMax. “This is not financial advice but sharing what my friends told me about the ethereum max token!” she wrote, adding hashtags like “#ad” and “#emax.”
This post was actually a paid promotion on behalf of EthereumMax, who paid Kardashian $250,000 for the acknowledgement. Unbeknownst to Kardashian at the time, this Instagram post violated the anti-touting provision of the federal securities laws, which resulted in a severe fine and investigation from the Securities and Exchange Commission.
“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.”
Kardashian has agreed to pay a $1.26 million fine to the SEC. This includes civil suit damages, plus the money she received for the promotion with interest. She also made a formal agreement to refrain from publicly promoting cryptocurrencies for at least three years.
Kim Kardashian agreed to pay a $1.26 million fine to the Securities and Exchange Commission to settle civil charges after the reality TV star touted a crypto asset, EthereumMax, on Instagram.https://t.co/BxhFaBDRkF
— CNN (@CNN) October 3, 2022
“Ms. Kardashian is pleased to have resolved this matter with the SEC,” said a statement from her attorneys. “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 agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits.”