Celebrity influencer Kim Kardashian agreed to a $1.26 million settlement with the Securities and Exchange Commission regarding cryptocurrency advertisements. The SEC claims Kardashian illegally promoted certain crypto tokens without disclosing payments for the advertisements.
Kardashian was paid $250,000 to promote EthereumMax's EMAX token on her Instagram account, the SEC says. Kardashian did not confirm or deny the allegations as part of the settlement.
EthereumMax is on the Ethereum blockchain, but not officially associated with the Ethereum network. EthereumMax offers staking rewards for its tokens, which allow EMAX holders to participate in non-fungible token (NFT) drops, "lifestyle perks" and other incentives within the ecosystem.
"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. "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."
Kardashian's $1.26 million settlement included a $1 million penalty and $260,000 in disgorgement and prejudgment interest. She also agreed not to promote any crypto asset securities for three years, the SEC says.
Kardashian isn't the first celebrity to face SEC crypto scrutiny. Boxing champ Floyd Mayweather and music producer DJ Khaled received slaps on the wrists in 2018 for not disclosing initial-coin-offering ad payments.
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