Kim Kardashian Pays $1.26M Fine for Crypto Ad
Media personality and businesswoman Kim Kardashian paid $1.26 million to settle a case with the Securities and Exchange Commission for failing to disclose payment for an Instagram post about EthereumMax tokens.
Kardashian neither admitted nor denied the charge of violating federal anti-touting laws for accepting $250,000 to promote EthereumMax in a June 13, 2021 post to her 225 million Instagram followers, documents show.
"This is not financial advice but sharing what my friends just told me about the Ethereum Max token!" the post read.
Note that Kim Kardashian used "not financial advice" and "#AD" in the ad that but still was charged by the SEC. pic.twitter.com/NMVq2y7fEo— TD (@tdaremarquis) October 3, 2022
The post included a link to the EthereumMax website and Kardashian also included the hashtag #AD at the bottom of the post. A day before the post, EthereumMax was $0.00000023. A day after the post, the price fell 22 percent. The EthereumMax price is $0.000000004311 as of Oct. 3.
Despite the hashtagged disclaimer, the SEC said Kardashian violated federal laws by promoting "a security for sale...without fully disclosing the receipt" of indirect or direct compensation.
"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," SEC Chair Gary Gensler said in a release.
Kardashian agreed to not promote any other "crypto asset securities" for three years and will continue to cooperate with the ongoing investigation, as part of the deal.