Kim Kardashian fined $1.26m by SEC for failing to disclose ties to crypto company
The reality TV star was charged for violating federal ‘anti-touting’ law after promoting EthereumMax to her many millions of Instagram followers.
SEC headquarters in Washington, DC
Kim Kardashian has been gassing up a crypto company on social media, and today she got burned.
This morning, the US Securities and Exchange Commission (SEC) announced that it had charged Kardashian $1.26m for promoting a crypto company on social media without disclosing that the content was part of a paid partnership.
The news arrives during a moment of reckoning for the crypto industry, which is struggling to regain its footing after a calamitous market crash earlier this year, and which has been subjected to growing scrutiny from governments in the US and around the world.
Kardashian was charged after promoting crypto platform EthereumMax – and its crypto EMAX tokens – on her Instagram profile earlier this year. The SEC said in a statement that the reality TV star violated its “anti-touting” provision of federal securities laws by not making it clear that she was in a paid partnership with the company.
She neither denied nor admitted to the charges and agreed to pay a $1m fine, plus the $260,000 that she received in payment from EthereumMax.
Kardashian currently has around 331 million followers on Instagram.
“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,” SEC chair Gary Gensler said in the statement. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals ... 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.”
The SEC also published a video on YouTube today in which Gensler reiterates that financial advice from influencers and celebrities should always be taken with a hearty grain of salt.
It’s not the first time the SEC has cracked down on celebrities for slip-ups like this. Boxer Floyd Mayweather and hip-hop producer DJ Khaled were charged in 2018 for failing to disclose their financial connections to a crypto company they had been touting on social media. More recently, the Commission launched an investigation into major crypto exchange platform Coinbase and charged 11 individuals for their connections to what it describes as “a fraudulent crypto pyramid and Ponzi scheme” called Forsage.
Several celebrities – including Matt Damon, Reese Witherspoon and Tom Brady – have faced some ridicule in recent months for their promotion of crypto companies in ads and on social media.
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