Kim Kardashian, a mega-influencer, agreed to pay a hefty fee on Monday for failing to disclose that she received payment to promote the EthereumMax cryptocurrency.
Kardashian consented to settle claims that she had improperly promoted the cryptocurrency tokens via her Instagram account, urging her 328 million followers to invest, by paying the Securities and Exchange Commission (SEC) $1.26 million in fines.
In a post to Instagram from June 2021, Kardashian stated, “This is not financial advise. But I want to share with you what my friends just told me about the EthereumMax token.
“#ad” was one among the hashtags included in the post, but there was also a link to EthereumMax’s website with instructions on how to purchase the digital tokens.
The charges against the social media sensation were made public by the SEC on Monday. According to the SEC’s decision, Kardashian did not disclose that she received $250,000 in exchange for posting about EMAX tokens on her Instagram account. She had consented to resolve the allegations, pay $1.26 million in fines, disgorgement, and interest, and assist the Commission’s ongoing inquiry.
“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,” said SEC Chair Gary Gensler.
He further added, “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
Gensler added that the case should serve as a warning to celebrities and others that they are obligated by law to report when and how much they are paid to promote investment in securities.