Kim Kardashian is in trouble with federal officials due to her cryptocurrency misadventure. The Securities and Exchange Commission stated on Monday morning that the famous reality TV personality and influencer had settled accusations that she had concealed a payment for promoting a cryptocurrency on her Instagram page.
According to Gary Gensler, chairman of the SEC, “this case is a reminder that just because celebrities or influencers recommend investing possibilities, including securities backed by crypto assets, doesn’t guarantee that those investment products are suitable for all investors.”
The SEC stated that Kardashian, whose estimated net worth is $1.8 billion, consented to pay $1.26 million to resolve allegations over a promotion for EthereumMax’s cryptocurrency asset on Meta’s Instagram. The regulator said she has promised to refrain from promoting cryptocurrency securities for three years and would assist with an ongoing investigation.
The SEC claimed that Kardashian, who has amassed a media and lifestyle empire, didn’t agree or disagree with the regulator’s conclusions.
A regulatory backlash against Kardashian’s EthereumMax promotion, which she shared on Instagram in June of last year, has already begun. Are you into cryptocurrency? She asked her tens of millions of followers as she opened the post. SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN IS NOT FINANCIAL ADVICE.
Investors filed a lawsuit against her, former NBA player Paul Pierce, and renowned boxer Floyd Mayweather Jr. earlier this year over their advertisements for EthereumMax, alleging that they had inflated the asset’s value unnecessarily.
On Monday, the SEC claimed that Kardashian had neglected to disclose that she had been paid $250,000 to write a piece regarding the EthereumMax-offered EMAX coins. The regulator said the post included a link to the EthereumMax website, which provides visitors with instructions on purchasing the tokens, along with the hashtag “#ad.”
According to the SEC, she broke federal securities laws by failing to report the payment. She consented to pay a total of $260,000, including the $1 million fine, interest, and cash.