Economy 5 minutes ago (Oct 03, 2022 01:13PM ET)
© Reuters. Kim Kardashian arrives on the red carpet for the annual White House Correspondents’ Association Dinner in Washington, U.S., April 30, 2022. REUTERS/Tom Brenner
By Doina Chiacu and Manya Saini
WASHINGTON (Reuters) -Kim Kardashian has agreed to settle charges of unlawfully touting a crypto security and to pay $1.26 million in penalties and associated fees, the U.S. Securities and Exchange Commission said on Monday.
Kardashian, a reality television star and influencer, failed to disclose that she was paid $250,000 to publish a post about EMAX tokens, the crypto asset security being offered by EthereumMax, on her Instagram account, the SEC said in a statement.
Under U.S. law, people who tout a certain stock or crypto security need to disclose not only that they are getting paid, but also the amount, the source and the nature of those payments, SEC Chair Gary Gensler said.
“This was really to protect the investing public – when somebody is touting that stock and whether that’s a celebrity or an influencer or the like, and that’s at the core of what this is about,” Gensler said in an interview with CNBC.
Kardashian, whose post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens, has agreed to pay the charge levied without admitting or denying the SEC’s findings.
“I want to acknowledge Miss Kardashian cooperating and ongoing cooperation. We really appreciate that,” Gensler added.
Kardashian is pleased to have resolved the case and fully cooperated with the SEC, her lawyer Michael Rhodes said.
“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,” Rhodes said in a statement.
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 businesses.
Regulating cryptocurrency markets has been high on the SEC’s agenda this year, as prices of digital assets suffer wild swings due to heightened recession fears, rising interest rates and geopolitical turmoil.
The U.S. regulator also charged Boxer Floyd Mayweather Jr. and a music producer known as “DJ Khaled” in November 2018 for allegedly not disclosing payments they received for promoting investments in initial coin offerings.
Neither Mayweather nor Khaled Mohamed Khaled admitted or denied the SEC’s charges, but agreed to pay a combined $767,500 in fines and penalties.