Kim Kardashian Pays $1.26 Million Fine For Paid Crypto Ad, SEC Says

WASHINGTON, Oct. 3 (Reuters) – Kim Kardashian has promoted everything from appetite-suppressing lollipops to melon-flavored liqueur and toilet paper, but it was her foray into the murky world of cryptocurrencies that landed her in hot water.

The reality TV star and influencer has agreed to settle the charges of wrongfully touting a crypto security and to pay $1.26 million in fines and fees, the US Securities and Exchange Commission said Monday.

Kardashian, who has 330 million followers on Instagram and 73.7 million followers on Twitter, did not disclose that she was awarded $250,000 from crypto firm EthereumMax to publish an Instagram post about its EMAX tokens, the SEC said.

In November 2017, the SEC warned celebrities seeking to monetize the emerging digital asset space that US rules require that they be made public when they are paid to subscribe to crypto tokens.

Since then, it has pursued a handful of other celebrities, including action movie star Steven Seagal, music producer “DJ Khaled” and boxer Floyd Mayweather Jr. for breaking that rule, but Kardashian is arguably the most prominent. read more

Her post included a link to the EthereumMax website, which provided instructions for potential investors to buy EMAX tokens. “Share what my friends just told me about the EthereumMax Token!” read the message.

Under US law, people who tout a particular stock or crypto security must disclose not only that they are being paid for it, but also the amount, source and nature of those payments, SEC Chair Gary Gensler said Monday.

“This was really to protect the investing public — when someone is touting stock and whether that’s a celebrity or an influencer or something like that, and that’s the gist of what this is about,” Gensler said in an interview with CNBC.

“I would like to acknowledge Ms. Kardashian for her cooperation and continued collaboration. We appreciate that very much,” Gensler added.

Kardashian has agreed to pay the charges without admitting or denying the SEC’s findings. Her attorney Michael Rhodes said Kardashian was happy to have resolved the matter.

“She wanted to get this case behind her to avoid a lengthy dispute. The agreement she reached with the SEC allows her to do that so she can continue with her many different business pursuits,” Rhodes said in a statement. a statement.

ONGOING COURT

Kardashian is also named, along with boxer Mayweather and former basketball star Paul Pierce, in an ongoing lawsuit filed in January by investors claiming losses after the celebrities promoted EMAX. read more

EMAX tokens are down about 98% since June 13, 2021, when Kardashian posted about them on Instagram to her then 225 million followers, according to website CoinMarketCap.com.

Last month, Kardashian, which has expanded its footprint in finance, launched a new private equity firm focused on investing in consumer and media companies.

Regulating cryptocurrency markets has been high on the SEC chairman’s agenda this year as digital asset prices suffer wild swings amid heightened fears of a recession, rising interest rates and geopolitical turmoil. read more read more

Reporting by Doina Chiacu in Washington, Manya Saini in Bengaluru; additional reporting by John McCrank in New York; Editing by Louise Heavens, Alexander Smith and Aurora Ellis

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