On Monday, the U.S. Securities and Exchange Commission (SEC) filed charges against the celebrity and socialite Kim Kardashian for unlawfully promoting the crypto asset Ethereummax. The U.S. regulator detailed that Kardashian agreed to settle the charges and pay $1.26 million in penalties, and plans to cooperate with the SEC’s ongoing investigation.
Kardashian Charged by SEC, Celebrity Agrees to Pay $1.26M in Penalties and Will Not Tout Any Crypto Assets for 3 Years
In mid-June 2021, Bitcoin.com News reported on the reality television series star Kim Kardashian and how she was shilling a token called ethereummax (EMAX). At the time, she shared an Instagram post that was marked as an “#AD,” and Kardashian said she was “sharing what my friends just told me about the Ethereum Max token.” Kardashian wasn’t the only celebrity that shilled EMAX, as the token was also promoted by the professional boxer Floyd Mayweather and former Boston Celtics forward Paul Pierce.
Reality television series star Kim Kardashian touted ethereummax (EMAX) to her Instagram followers in June 2021 (post pictured left). The U.S. SEC’s Division of Enforcement director Gurbir S. Grewal said: “Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”
The SEC announcement on October 3 says Kardashian failed to disclose that she was paid $250,000 to publish the Instagram post to her 228 million followers that day. “Kardashian’s post contained a link to the Ethereummax website, which provided instructions for potential investors to purchase EMAX tokens,” the U.S. regulator detailed on Monday. SEC chair Gary Gensler put out a statement concerning Kardashian’s charges and he appeared in an animated video about the affair.
“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,” Gensler remarked during the SEC announcement. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.” Gensler added:
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.
Essentially, the SEC order notes that the reality TV star and socialite violated anti-touting laws. Without any admission or denial, Kardashian agreed to settle with the SEC for $1.26 million which includes roughly $260,000 in disgorgement penalties. Furthermore, Kardashian has promised not to shill any crypto asset-related securities for three years. Kardashian has had a rough month, as she’s been dealing with the controversy surrounding the sex tape that was released featuring herself and the popular singer and actor, Ray J.
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