"ARE YOU INTO CRYPTO??? THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN." So began an Instagram post Kim Kardashian posted in June 2021, in which she pushed EthereumMax’s crypto asset. She did mark it with #ad, but the SEC on Monday said she failed to report that she received $250,000 in exchange for the post in violation of federal securities laws. CNBC reports the matter has now been settled, with Kardashian agreeing to pay $260,000 (the original payment plus interest) and a $1 million penalty. She must also refrain from posting about crypto securities for three years.
As Gurbir Grewal, head of the SEC's enforcement division explains per the AP, "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." Her post included a link to the EthereumMax website, which gave instructions on how to invest in EMAX, which the Financial Times notes was then a new coin.
Here's a statement on the matter from Kardashian's lawyer: "Kardashian fully cooperated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter. 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." Kardashian neither admitted nor denied wrongdoing as part of the settlement. (Read more Kim Kardashian stories.)