Cryptoassets  

Kim Kardashian fined for touting crypto asset on social media

Kim Kardashian fined for touting crypto asset on social media
  Kim Kardashian pictured at the 2022 Met Gala in May

Kim Kardashian will pay $1.26mn in penalties after settling charges brought against her by the US Securities and Exchange Commission (SEC) for promoting a crypto asset on social media.

The charges related to the failure by Kardashian to disclose that she was paid $250,000 by EthereumMax to post about EMAX tokens on her Instagram account. 

The post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.

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The SEC found that her actions amounted to a violation of the anti-touting provision of US federal securities laws. 

Without admitting or denying the SEC’s findings, Kardashian agreed to pay the $1.26mn, including approximately $260,000 in disgorgement, which represents her promotional payment, interest, and a $1mn penalty. 

Kardashian also agreed to not promote any crypto asset securities for three years.

SEC chair Gary Gensler said the case is a reminder that when celebrities endorse investment opportunities it does not mean those investment products are right for investors.

"We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals,” Gensler said.

He added: "Ms Kardashian’s case also serves as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities.”

"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," said Gurbir Grewal, director of the SEC’s division of enforcement. 

"Investors are entitled to know whether the publicity of a security is unbiased, and Ms Kardashian failed to disclose this information."

Kardashian also agreed to cooperate with the SEC’s ongoing investigation into the matter. 

jane.matthews@ft.com