Kardashian settled Securities and Exchange Commission charges that she failed to disclose a payment she received for touting a crypto asset on her Instagram feed.
Kimberly Noel Kardashian is an American media personality, socialite, model, and businesswoman.
Under the settlement, without “admitting or denying the SEC’s findings,” Kardashian also agreed to not promote any crypto asset securities for three years, per the agency.
The top U.S. financial regulator has charged celebrity Kim Kardashian for touting a cryptocurrency on her Instagram account.
The SEC said Kardashian failed to disclose that she was paid to publish a post on her Instagram account about EMAX tokens, a crypto asset security being offered by EthereumMax.
“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. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
Kardashian, who has around 330 million Instagram followers, was paid $250,000 to promote cryptocurrency offered by EthereumMax called EMAX tokens.
Kardashian’s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.
“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 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.”
The financial regulator has previously warned consumers about “potentially unlawful celebrity-backed crypto asset offerings.”
As the popularity of crypto has ballooned, companies have spent millions of dollars on marketing. Many of them have hired celebrity spokespersons, including comedian Larry David and actor Matt Damon, to promote their products. But after the value of Bitcoin and other digital currencies plummeted, many of them have been criticized for boosting them.