On Monday the Securities and Exchange Commission charged Kim Kardashian over a post she made promoting crypto asset security sold by EthereumMax “without disclosing the payment she received for the promotion.”
Kardashian will now pay $1.26 million in a settlement on the civil charges according to an announcement by the SEC.
According to the SEC Kardashian did not disclose she received $250,000 in exchange for a post promoting EMAX tokens on her Instagram account.
SEC Chair Gary Gensler gave a statement saying, “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.”
In a video published by the SEC, Gensler warns, “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.”
“We shouldn’t confuse those skills, though, with the very different skills needed to offer appropriate investment advice”
The settlement amount was determined by a $1 million penalty and the monies received for the promotion. Kardashian has also agreed not to promote any crypto asset securities for three years.
Kardashian’s lawyers gave a statement to ABC News, “Ms. Kardashian is pleased to have resolved this matter with the SEC. 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.”
In California, there is an ongoing class action lawsuit that was filed last January which names Kardashian as well as other celebrities alleging investors suffered losses after the celebrities promoted crypto coin. Many celebrities endorsed EMAX according to the suit.
Kardashian has filed to have this suit dismissed claiming that none of those investors saw her promotional post on Instagram.
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