Kim Kardashian settles SEC charges over Instagram EthereumMax crypto promo

Reality TV star Kim Kardashian launched a personal fairness fund, Skky Partners, which she co-founded with Jay Sammons, a former accomplice on the funding agency Carlyle Group.

Photo by James Devaney/GC Images by way of Getty Images

Kim Kardashian’s crypto misadventure has landed her in scorching water with federal regulators.

The actuality TV celebrity and influencer has settled Securities and Exchange Commission charges that she didn’t disclose a cost she acquired for touting a crypto asset on her Instagram feed, the company introduced Monday morning.

“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,” Gary Gensler, chairman of the SEC, stated in a information launch.

Representatives for Kardashian did not instantly reply to a request for remark.

Kardashian, who’s reportedly price $1.8 billion, agreed to pay $1.26 million to settle the charges over a promotion on Meta’s Instagram for EthereumMax’s crypto asset, the SEC stated. She may even cooperate with an ongoing investigation, and has agreed to not promote crypto securities for 3 years, the regulator added.

However, Kardashian, who has constructed a media and way of life empire, neither admitted to nor denied the regulator’s findings, the SEC stated.

Kardashian has already felt regulatory warmth over her EthereumMax promo, which she posted on Instagram in June of final yr. She began the submit by asking her thousands and thousands of followers, “ARE YOU INTO CRYPTO??? THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN.”

Investors sued her, former NBA star Paul Pierce and celebrity boxer Floyd Mayweather Jr. earlier this yr over their promos for EthereumMax, accusing them of artificially inflating the worth of the asset.

The SEC on Monday stated Kardashian didn’t report that she was paid $250,000 to publish a submit about EMAX tokens, a crypto asset supplied by EthereumMax. The submit, which featured the hashtag “#ad,” included a hyperlink to the EthereumMax web site, which provides customers directions about methods to purchase the tokens, the regulator added.

Her failure to reveal the cost was a violation of federal securities legal guidelines, the SEC stated. She agreed to pay $260,000, which incorporates the cost she acquired, plus curiosity, along with the $1 million penalty, the company added.

CNBC’s Jacqueline Corba contributed to this report.

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