The U.S Securities and Exchange Commission (“SEC”) announced on Monday (October 3) that it had brought charges against American media personality and entrepreneur Kim Kardashian for alleged promotion of cryptoasset $EMAX.
The SEC’s press release stated that these charges were “for touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion” and that she had “agreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate with the Commission’s ongoing investigation.”
The press release went on to mention that its order “finds that Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens, the crypto asset security being offered by EthereumMax” and that “Kardashian’s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.”
SEC Chair Gary Gensler had this to say:
“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… We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals… 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.“
And Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, stated:
“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. Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.“
The SEC also said that “without admitting or denying the SEC’s findings, Kardashian agreed to pay the aforementioned $1.26 million, including approximately $260,000 in disgorgement, which represents her promotional payment, plus prejudgment interest, and a $1,000,000 penalty.” Apparently, she also “agreed to not promote any crypto asset securities for three years.”