Kim Kardashian pays $1.26 million fine for paid crypto ad, SEC says

WASHINGTON, Oct 3 (Reuters) – Kim Kardashian has promoted everything from appetite suppressant lollipops to melon liqueur to toilet paper, but it’s her foray into the murky world of cryptocurrencies that is put in hot water.

The reality TV star and influencer has agreed to settle charges of illegally selling a crypto security and pay $1.26 million in penalties and fees, the U.S. Securities and Exchange Commission announced on Monday.

Kardashian, who has 330 million Instagram followers and 73.7 million Twitter followers, did not disclose that she was paid $250,000 by crypto firm EthereumMax to post an Instagram post on her tokens. EMAX, the SEC said.

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In November 2017, the SEC warned celebrities seeking to profit from the emerging digital asset space that US rules require them to disclose when they are paid to endorse crypto tokens.

Since then, he’s sued a handful of other celebrities, including action movie star Steven Seagal, music producer ‘DJ Khaled’ and boxer Floyd Mayweather Jr. for breaking that rule, but Kardashian is arguably most prominent. Read more

His post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens. “Share what my friends just told me about the EthereumMax token!” the read message.

Under US law, people who tout a certain stock or crypto security must disclose not only that they are paid to do so, but also the amount, source and nature of those payments, the president said on Monday. of the SEC, Gary Gensler.

“It was really to protect the investing public – when someone is touting this stock and whether it’s a celebrity or an influencer or the like, and that’s the heart of what it’s all about. “, Gensler said in an interview with CNBC.

“I want to thank Miss Kardashian for her cooperation and continued cooperation. We really appreciate that,” Gensler added.

Kardashian agreed to pay the fees without admitting or denying the SEC’s findings. Her attorney Michael Rhodes said Kardashian was thrilled to have the case resolved.

“She wanted to put this matter behind her to avoid a protracted dispute. The agreement she reached with the SEC allows her to do that so she can move forward with her many different business pursuits,” said Rhodes in a statement.

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Kardashian is also named, along with boxer Mayweather and former basketball star Paul Pierce, in an ongoing lawsuit filed in January by investors who allege they suffered losses after the celebrities promoted EMAX. Read more

EMAX tokens are down about 98% since June 13, 2021, when Kardashian posted some on Instagram to her 225 million followers, according to website CoinMarketCap.com.

Last month, Kardashian, who has expanded her footprint in the world of finance, launched a new private equity firm focused on investing in consumer and media companies.

Regulating cryptocurrency markets has been one of the SEC Chairman’s top priorities this year as prices of digital assets see wild swings amid heightened fears of recession, rising interest rates and geopolitical unrest. read more read more

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Reporting by Doina Chiacu in Washington, Manya Saini in Bengaluru; additional reporting by John McCrank in New York; Editing by Louise Heavens, Alexander Smith and Aurora Ellis

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