Kim Kardashian “agreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate with” investigations, the U.S. Securities and Exchange Commission (SEC) said
Kim Kardashian has agreed to settle charges from the U.S. Securities and Exchange Commission (SEC) “for touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion.”
The SEC announced the charges on Monday in an official release, and stated that The Kardashians star, 41, “agreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate with the Commission’s ongoing investigation” without admitting or denying the SEC’s findings.
According to the group, Kardashian violated protocols when she didn’t reveal that she received a quarter of a million dollars to make an Instagram post promoting EthereumMax’s EMAX tokens, a crypto asset security product, along with a link to the company’s website for would-be purchasers.
“Ms. Kardashian is pleased to have resolved this matter with the SEC,” the SKIMS founder’s lawyer says in a statement obtained by PEOPLE. “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.”
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
“She wanted to get this matter behind her to avoid a protracted dispute,” the lawyer adds. “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 Chair Gary Gensler said in a statement that Kardashian’s 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.”
“We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals,” Gensler continued.
He concluded, “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.”
According to Business Insider, the ad was posted to Kardashian’s Instagram Story in June 2021 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!”
“A few minutes ago Ethereum Max burned 400 trillion tokens- literally 50% of their admin wallet giving back to the entire E-Max community,” she reportedly added at the time.
The SEC said in their Monday release that the reality star “violated the anti-touting provision of the federal securities laws,” and that her $1.26 payment that 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.”
“Kardashian also agreed to not promote any crypto asset securities for three years,” they said.
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