Kim Kardashian has run into some trouble with the Securities and Exchange Commission.
The fashion mogul and brand builder has been charged by the SEC for posting about a crypto asset security without saying she had received payment to promote it. According to the SEC, Kardashian was paid $250,000 to post on Instagram about EMAX, an asset from EthereumMax. The post included a link with instructions for potential investors.
Kardashian will pay $1.26 million in penalties, disgorgement, and interest in an agreement to settle the charges, the SEC said. She will also cooperate with the investigation and has agreed to halt promotion of crypto asset securities for three years.
“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,” said SEC Chair Gary Gensler in a statement. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
Federal securities laws dictate that celebrities or other people that promote a crypto asset security must disclose the compensation they have received for the promotion, as well as the nature and source of it, explained the director of the SEC’s division of enforcement Gurbir S. Grewal in a statement. Such information allows potential investors to understand the nature of a promotion for a security, and if the promotor is biased or not.
Kardashian is the creator and owner of several brands, including the SKIMS shapewear line and skincare line, SKKN.
A lawyer for Kardashian said in a statement to CNBC that she is pleased to have resolved the matter.
“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 statement said.
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