Kim Kardashian has been fined $1.26 million by the United States Securities and Exchange Commission (SEC) over a sponsored Instagram post in which Kardashian promoted a crypto asset, EthereumMax.
The SEC stated that Kardashian had failed to disclose that she had been paid $250,000 by EthereumMax to promote their services on her Instagram. Kardashian has also agreed to cooperate with the SEC’s ongoing investigation and will not promote crypto securities for three years.
The SEC found that Kim Kardashian had violated the anti-touting provision of federal securities laws. Kardashian did not admit or deny the SEC’s findings.
SEC Chair Gary Gensler said in a statement that: “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 an investment’s potential risks and opportunities in light of their own financial goals.”
“Ms. Kardashian is pleased to have resolved this matter with the SEC,” a statement from her attorneys said. “Kardashian fully cooperated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter. 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.”
The settlement reached between the two includes a $1 million dollar fine and a forfeiture of the $250,000 payment received, as well as interest.
Gensler tweeted that “any celebrity or influencer’s incentives aren’t necessarily aligned with yours.” He added that the investing public shouldn’t confuse the skills of celebrities with “the very different skills needed to offer appropriate investment advice.”
In an interview with CNBC on Monday, Gensler said that utilizing #ad was not enough to comply with SEC laws in regards to promoting investments.
“If you’re advertising perfume, or you’re advertising vacation homes or anything else on the internet, there are various laws related to that. But these are the securities laws.”
According to Forbes, Kardashian’s net worth is estimated at $1.8 billion. A $1.26 million fine would be the equivalent of a fine of less than $100 for an average American household, which is usually a net worth of $122,000.
Thanks for reading DZSH. Never miss an update when you sign up for our newsletter today!
