Kim Kardashian has agreed to pay $US1.26 million ($1.96 million) to settle Securities and Exchange Commission charges that she promoted a cryptocurrency on Instagram without disclosing she had been paid $US250,000 ($387,986) to do so.
The SEC said on Monday that the reality TV star and entrepreneur has agreed to co-operate with its ongoing investigation.
The SEC said Kardashian 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.
Today we announced charges against Kim Kardashian for promoting a crypto security offered by EthereumMax without disclosing the payment she received for the promotion.
Kardashian agreed to settle the charges, pay $1.26 million, and cooperate with the investigation.
— U.S. Securities and Exchange Commission (@SECGov) October 3, 2022
“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.
“Ms Kardashian is pleased to have resolved this matter with the SEC. Kardashian fully co-operated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter,” a lawyer for Kardashian said in a statement.
“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.”
Although Kardashian is well known for reality TV, currently appearing on The Kardashians, she is also a successful businesswoman.
Her brands include SKIMS, which has shapewear, loungewear and other products, and a skincare line called SKKN.
Cryptocurrency is facing increasing attention from US Congress.
The latest bipartisan proposal 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 Securities and Exchange Commission.
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.
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