According to a statement released by the U.S. Securities and Exchange Commission (SEC), reality television personality Kim Kardashian was charged on Monday with improperly endorsing cryptocurrency security.
The agency claimed that Kardashian decided to settle the allegations without acknowledging or denying wrongdoing. She consented to paying $1.26 million in fines.
The Securities and Exchange Commission (SEC) claimed that Kardashian neglected to disclose that she had received $250,000 in exchange for her support of EthereumMax tokens in an Instagram post from June 2021. She must pay that sum along with interest and a one million dollar fine.
She had posted a link to the EthereumMax website where prospective investors could get information on how to buy EMAX coins.
SEC chairman Gary Gensler said, “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.”
Gensler added, “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.”
Ms. Kardashian, who is thought to be worth $1.4 billion, and Jay Sammons, a former global head of consumer, media, and retail for the Carlyle Group, one of the biggest private equity firms in the world, co-founded SKKY Partners.
Kim Kardashian Starts a New Private Equity Company
Kardashian founded a new private equity company last month with a focus on investing in consumer and media industries. According to her attorney, Michael Rhodes, Kardashian is satisfied with how the issue concluded and cooperated fully with the SEC.
In a statement, Rhodes said, “She wanted to get this matter behind her to avoid a protracted dispute. The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits.”
In a statement released in 2017, the SEC urged investors “to research potential investments rather than rely on paid endorsements from artists, sports figures or other icons.”
Boxer Floyd Mayweather Jr. and musician DJ Khaled were also previously penalized by the US government for failing to disclose money they received for promoting investments in initial coin offerings.