Kim Kardashian to pay $1.26 million to advertise crypto, without saying she was paid to do so
The US government announced today that celebrity Kim Kardashian will pay more than $1 million to settle a case involving cryptocurrency. The Securities and Exchange Commission said in a press release that Kardashian will pay $1.26 million in fines and other fees for allegations that she used her massive social media influence to hype an EthereumMax crypto-asset security without telling fans she was being paid for to promote it.
Kardashian has not admitted or denied any of the SEC’s allegations and is paying $1.26 million to settle the case. She also agreed not to promote anything related to crypto for three years.
Today we announced charges against Kim Kardashian for promoting a cryptocurrency offered by EthereumMax without disclosing the payment she received for the promotion.
Kardashian agreed to settle the charges, pay $1.26 million and cooperate with the investigation.— US Securities and Exchange Commission (@SECGov) 3 October 2022
The SEC said Kardashian was paid $250,000 for an Instagram post publicizing EMAX tokens without properly disclosing that she was paid for it. Kardashian has more than 330 million followers on Instagram, so her reach is truly enormous.
The SEC’s Gary Gensler said this case should be a reminder to people to do their own research. “This case is a reminder that when celebrities or influencers endorse investment opportunities, including crypto-assets, that doesn’t mean those investment products are right for all investors,” Gensler said.
Gensler added, “Ms. Kardashian’s case also serves as a reminder to celebrities and others that the law requires them to disclose when and how much they are paid to promote investment in securities.”
Federal securities laws state that anyone promoting a crypto-asset security must disclose “the nature, source and amount of compensation they received” for that promotion.
“Investors have a right to know whether the publicity of a security is objective, and Kardashian failed to disclose that information,” SEC Enforcement Chief Gurbir S. Grewal said.
Kardashian has her own video game, Kim Kardashian: Hollywood, which is developed by GluMobile. EA bought the company for more than $2 billion in 2021 because mobile games are bigger than console and PC titles.
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