Kim Kardashian pays $1.2 million to settle with SEC over crypto promotion
To avoid a protracted dispute, Kim Kardashian agreed to pay US$1.26 million to settle Securities and Exchange Commission’s (SEC) charges that she had promoted a cryptocurrency on Instagram without revealing that she had been paid a fee of US$250,000 to do so.
The SEC said on Monday (October 3) that the reality TV star and entrepreneur agreed to cooperate with its ongoing investigation. According to the SEC, Kardashian had failed to disclose that she was paid to publish a post on her Instagram account about EMAX tokens, a 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.
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, Gurbir Grewal, director of the SEC’s division of enforcement, said in a prepared statement.
Kardashian has agreed to not promote any crypto asset securities for three years.
Kardashian’s lawyer said in a statement that she is pleased to have resolved this matter with the SEC. “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,” said the lawyer for Kardashian.
While Kardashian is well known for reality TV, currently appearing on ‘The Kardashians’ on Hulu streaming service, she is also a successful businesswoman. Her brands include SKIMS, which has shapewear, loungewear and other products, and a skincare line called SKKN.
Also read: Top 10 global havens to avoid paying tax on cryptocurrency
Cryptocurrency is facing increasing attention from Congress. The latest bipartisan proposal came in August from Senators Debbie Stabenow, D-Mich., and John Boozman, R-Ark. It would hand the regulatory authority over Bitcoin and Ether to the Commodities Futures Trading Commission.
Bills proposed by other members of Congress and consumer advocates have suggested giving the authority to the SEC.
This year, crypto investors have seen prices plunge and companies crater with fortunes and jobs disappearing overnight, and some firms have been accused by federal regulators of running an illegal securities exchange.