Kim Kardashian Settles SEC Charges Over EthereumMax Cryptocurrency Instagram Promotion

Reality TV star Kim Kardashian founded private equity fund Skky Partners, which she co-founded with Jay Sammons, a former partner at investment firm Carlyle Group.

Photo by James Devaney/GC Images via Getty Images

Kim Kardashian’s crypto adventure has put her at a standstill before federal regulators.

The agency announced on Monday morning that the reality TV superstar and influencer has settled allegations from the Securities and Exchange Commission that she did not disclose a payment she received for advertising a crypto asset on her Instagram feed.

“This case is a reminder 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,” said Gary Gensler, SEC chairman, in a press release. . .

Representatives for the Kardashians did not immediately respond to a request for comment.

According to the SEC, Kardashian, who is reportedly worth $1.8 billion, has agreed to pay $1.26 million to settle charges in connection with an Instagram Meta promotion for crypto asset EthereumMax. It will also cooperate with the ongoing investigation and has agreed not to promote crypto-currency securities for three years, the regulator added.

However, Kardashian, who built a media and lifestyle empire, neither acknowledged nor denied the regulator’s findings, the SEC said.

Kardashian has already felt some scrutiny from regulators over her EthereumMax promo she posted on Instagram last June. She started the post by asking her millions of followers: “DO YOU DO CRYPTO??? THIS IS NOT FINANCIAL ADVICE, BUT A DIVISION OF WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN.”

Investors sued her, former NBA star Paul Pierce and superstar boxer Floyd Mayweather Jr. earlier this year over their EthereumMax promotions, accusing them of artificially inflating the asset’s value.

On Monday, the SEC said that Kardashian failed to disclose that she was paid $250,000 for posting about EMAX tokens, a crypto asset offered by EthereumMax. The post with the hashtag “#ad” included a link to the EthereumMax website, which gives users instructions on how to buy the tokens, the regulator added.

The SEC said its refusal to disclose the payment was a violation of federal securities laws. The agency added that she agreed to pay $260,000, including the payment she received plus interest, in addition to a $1 million fine.

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