Kim Kardashian has agreed to settle the charges she faced from the U.S. Securities and Exchange Commission (SEC) for not disclosing the payment she received for the promotion of crypto currency on her Instagram post.
The charges were announced by the SEC on Monday with an official press release that stated that the 41-year-old was charged for “touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion. Kardashian agreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate with the Commission’s ongoing investigation.”
The release continued, “The SEC’s order finds that Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens, the crypto asset security being offered by EthereumMax. Kardashian’s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.”
Kim’s attorney released a statement that reads, “Ms. Kardashian is pleased to have resolved this matter with the SEC. 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.”
Adding, “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.”
Today we announced charges against Kim Kardashian for promoting a crypto security 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.
— U.S. Securities and Exchange Commission (@SECGov) October 3, 2022
The SEC release notes that the reality star’s case is being used as an example for other celebrities and influencers to disclose their endorsements on social media.
“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,” SEC Chair Gary Gensler said in the a statement.
The ad surrounding the SEC filing was reportedly posted to Kim’s Instagram Story in June 2021, according to Business Insider and read, “Are you guys into crypto???? … This is not financial advice but sharing what my friends just told me about the Ethereum Max token!”
The SEC said in Kim $1.26M settlement she agreed to (“without admitting or denying the SEC’s findings”) includes “approximately $260,000 in disgorgement, which represents her promotional payment, plus prejudgment interest, and a $1,000,000 penalty.”
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