Kim Kardashian fined $1 million for touting EMAX tokens on social media
“Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”
Kim Kardashian has settled with the Securities and Exchange Commission after being charged with violating the anti-touting provision of the federal securities laws.
The celebrity agreed to pay $1.26 million in penalties, disgorgement, and interest, and cooperate with the regulator’s ongoing investigation into EthereumMax.
Kim Kardashian was paid $250 million to promote EMAX tokens
Although she did not admit or deny the SEC’s allegations, Kim Kardashian was found to have touted on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion.
She was paid $250,000 to publish a post on her Instagram account about EMAX tokens, the crypto asset security being offered by EthereumMax. Kardashian’s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.
She agreed to pay the aforementioned $1.26 million, including 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.
Celebrities and others must disclose they were paid to promote investments
“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. We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals”, said SEC Chair Gary Gensler. “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.”
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, commented: “The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion. Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”