Reality star Kim Kardashian will have to pay $1.26 million to the Securities and Exchange Commission (SEC). This is over charges that she failed to disclose she was paid to promote a crypto asset on her Instagram feed.
“Are you guys into crypto? This is not financial advice but sharing what my friends told me about the ethereum max token,” The Instagram post from June of 2021 reads.
While the post did have #ad in it Kardashian failed to disclose that she was paid $250,000 to promote EthereumMax to her 250 million Instagram followers. This is in direct violation of federal guidelines. “Congress passed a law many decades ago called the Securities Act, and it was to protect the public,” said chairman of the SEC Gary Gensler on CNBC’s “Squawk Box” earlier today. “Part of that law said that if you tout a stock you have to disclose if you’re getting paid.”
Investors sued Kardashian, former NBA star Paul Pierce, and boxer Floyd Mayweather Jr. for their promotions for EthereumMax. Accusing all 3 of artificially inflating the value of the asset. “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,” said Gensler via a news release.
It seems she is just happy it is all over. “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,” a statement read.
Kardashian will pay $260,000 which is her original payment for the ad plus interest, and a $1 million penalty. She will also not promote crypto assets for at least 3 years.