Kim Kardashian Settles SEC Charges Over Instagram EthereumMax Crypto Campaign
Reality TV star Kim Kardashian launched a private equity fund, Skky Partners, which she co-founded with Jay Sammons, a former partner at investment firm Carlyle Group.
Photo by James Devaney/GC Images via Getty Images
Kim Kardashian’s crypto debacle has landed her in hot water with federal regulators.
The reality TV superstar and influencer has settled Securities and Exchange Commission charges that she failed to disclose a payment she received for featuring a crypto asset on her Instagram feed, the agency announced Monday morning.
“This case is a reminder that when celebrities or influencers endorse investment opportunities, including crypto-asset securities, that doesn’t mean those investment products are right for all investors,” SEC Chairman Gary Gensler said in a press release.
Representatives for Kardashian did not immediately respond to a request for comment.
Kardashian, who is reportedly worth $1.8 billion, agreed to pay $1.26 million to settle allegations of a campaign on Meta’s Instagram for EthereumMax’s crypto assets, the SEC said. She will also cooperate with an ongoing investigation, and has agreed not to market cryptocurrencies for three years, the regulator added.
Kardashian, who has built a media and lifestyle empire, neither admitted nor denied the regulator’s findings, the SEC said.
Kardashian has already felt regulatory heat over her EthereumMax promo, which she posted on Instagram last June. She started the post by asking her millions 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 superstar boxer Floyd Mayweather Jr. earlier this year due to their promotions for EthereumMax, accusing them of artificially inflating the value of the asset.
The SEC on Monday said Kardashian failed to report that she was paid $250,000 to publish a post about EMAX tokens, a crypto asset offered by EthereumMax. The post, which contained the hashtag “#ad”, included a link to the EthereumMax website, which provides users with instructions on how to buy tokens, the regulator added.
Her failure to disclose the payment was a violation of federal securities laws, the SEC said. She agreed to pay $260,000, which includes the payment she received, plus interest, in addition to the $1 million penalty, the agency added.
