 charges. SEC stated that she promoted a cryptocurrency on Instagram without disclosing she’d been paid $250,000 to do so.){kind=link}
Nearly ten months after being sued in what was being referred to as a ‘pump and dump’ crypto case, Kim Kardashian has now agreed to pay a mammoth penalty of $1.26 million to settle US Securities and Exchange Commission (SEC) charges. SEC stated that she promoted a cryptocurrency on Instagram without disclosing she’d been paid $250,000 to do so.
In a press release yesterday, the SEC said that the reality TV star and entrepreneur has agreed to cooperate with its ongoing investigation. In her settlement, 41-year-old Kardashian did not admit or deny the SEC’s findings.
It mentioned that the charges against Kim Kardashian are for touting on social media a crypto asset security offered and sold by EthereumMax, without disclosing the payment she received for the promotion. Kardashian agreed to settle the charges, and pay $1.26 million in penalties, disgorgement and interest.
ET spotlight
The SEC’s order finds that Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens, the crypto asset security being offered by EthereumMax. Kardashian’s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.
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A Reminder To Celebrities
“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 SEC Chair Gary Gensler, as per the press release. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
“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,” SEC’s Chair Gensler mentioned.
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“The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”
Also, the SEC’s order finds that Kardashian violated the anti-touting provision of the federal securities laws. Without admitting or denying the SEC’s findings, Kardashian agreed to pay the aforementioned $1.26 million, including 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.
The SEC’s investigation, which is continuing, is being conducted by Jon A. Daniels, Alison R. Levine, and Pamela Sawhney of the Enforcement Division’s Crypto Assets and Cyber Unit, and Kerri Palen, Lisa Knoop and Victor Suthammanont of the New York Regional Office. The case was supervised by Mark R. Sylvester of the Crypto Assets and Cyber Unit and Carolyn Welshhans.
The SEC’s statement urging caution regarding potentially unlawful celebrity-backed crypto asset offerings can be found here. SEC Chair Gensler also published a video warning investors not to make investment decisions based solely on the recommendations of a celebrity or influencer.
Also Read: Businesses In Singapore Begin Accepting Crypto Payments
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