Kim Kardashian has paid a seven-figure sum to the Securities and Exchange Commission after promoting a cryptocurrency in an alleged “pump and dump” scheme.
The SEC charged the billionaire makeup mogul and social media influencer “for touting on social media a crypto asset security … without disclosing the payment she received for the promotion,” the New York Post reports.
Kardashian agreed to settle the charges, pay $1.26 million in penalties disgorgement and interest, as well as “cooperate with the ongoing investigation.”
The feds claim that Kardashian “failed to disclose” that she was paid $250,000 to advertise EMAX crypto tokens—a digital coin sold by EthereumMax—to her hundreds of millions of Instagram followers. She paid the penalties “without admitting or denying the SEC’s findings” and agreed to refrain from promoting all crypto for three years.
News of Kardashian’s questionable EMAX promotion broke earlier this year, when a lawsuit filed in an LA court alleged that she, boxing legend Floyd Mayweather and other celebrities had misled followers into buying the cryptocurrency in a “pump and dump” scheme.
The suit claimed EMAX executives collaborated with celebrity influencers to tout “the prospects of the Company and the ability for investors to make significant returns.”
“In truth, Defendants marketed the EMAX Tokens to investors so that they could sell their portion of the Float for a profit,” the suit read, per the New York Post.
See Twitter reactions to Kardashian’s crypto debacle from economist Robert Reich and others below:
“Kardashian’s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens,” the SEC said in a statement.
“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.
“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.”
