Kardashian has settled Securities and Exchange Commission charges for failing 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.
As part of the settlement, without “admitting or denying the SEC’s findings,” Kardashian also agreed not to promote any crypto asset securities for three years, according to the agency.
The top US financial regulator has accused celebrity Kim Kardashian of touting a cryptocurrency on her Instagram account.
The SEC said Kardashian did not disclose that she had been paid to post an article on her Instagram account about EMAX tokens, a crypto asset security offered by EthereumMax.
“This case reminds us that when celebrities or influencers endorse investment opportunities, including crypto-asset securities, it does not mean that these investment products are suitable for all investors,” the chairman said. of the SEC, Gary Gensler. “We encourage investors to consider the potential risks and opportunities of an investment in light of their own financial objectives.”
Kardashian, who has around 330 million Instagram followers, received $250,000 to promote the 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.
“Federal securities laws clearly state that any celebrity or other person 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 enforcement division. . “Investors have a right to know whether a stock’s publicity is unbiased, and Ms. Kardashian has withheld that information.”
The financial regulator previously warned consumers about “potentially illegal celebrity-backed crypto asset offerings.”
As the popularity of crypto skyrocketed, companies 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 fall in value of Bitcoin and other digital currencies, many of them have been criticized for boosting them.