NEW YORK, NY - SEPTEMBER 20: Kim Kardashian is seen at "Good Morning America" on September 20, 2022 in New York City. (Photo by Raymond Hall/GC Images)
Kim Kardashian has been charged and fined $1.26 million by the Securities and Exchange Commission for an Instagram post promoting a cryptocurrency that was characterized as a “pump and dump” scheme in a lawsuit filed against the influencer earlier this year.
On Monday, the SEC announced charges against the 41-year-old reality television star “for touting on social media a crypto asset security…. without disclosing the payment she received for the promotion,” the New York Post reports.
She allegedly made $250,000 for the promotional Instagram post.
“This is not financial advice, but sharing what my friends just told me about the Ethereum Max token!” Kim’s post read. “A few minutes ago, Ethereum Max burned 400 trillion tokens- literally 50 percent of their admin wallet (and) giving back to the entire E-max community.”
The SEC added that Kim K “agreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate,” with an investigation still ongoing.
Kim reportedly paid the penalties “without admitting or denying the SEC’s findings,” and has agreed to not promote any crypto currency for three years, according to the agency.
A spokesperson for the social media influencer said that Kim was “please to have resolved this matter” and that she “fully cooperated with the SEC from the very beginning.”
“Ms. Kardashian is pleased to have resolved this matter with the SEC,” a spokesperson for Kardashian told the Post.
“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.”
The spokesperson added that “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.”
SEC Chairman Gary Gensler said the case against Kim will make it clear to the masses that investment opportunities promoted by celebs and social media influencers “are (not) right for all investors,” and to be weary of such promotions, the Post reports.
“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,” SEC Chair Gary Gensler said.
Gensley added that the case will also make it clear that celebs and influencers can and will be prosecuted should they fail to publicly disclose how much they were paid for promoting investment opportunities.
“We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals,” Gensley said.
“Ms. Kardashian’s case also serves as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities.”
Earlier this year, Kardashian and former boxing champion Floyd Mayweather were named in a lawsuit claiming they misled their online followers by promoting “pump and dump” cryptocurrency schemes.
Former Boston Celtics star Paul Pierce was also named in the suit, according to the Post.
Both Kim and Floyd were accused of making “false or misleading statements” while promoting Ethereum Max tokens.
“In truth, Defendants marketed the EMAX Tokens to investors so that they could sell their portion of the Float for a profit,” the lawsuit reads.
Mayweather paid over $600,000 in a settlement with the SEC, without admitting or denying the regulator’s findings, NBC News reports.
