Socialiate Kim Kardashian arrives at the 2022 White House Correspondents' Association Dinner at the Washington Hilton in Washington, D.C., on April 30. She agreed to pay $1.26 million to the Securities and Exchange Commission on Monday. File Photo by Bonnie Cash/UPI | License Photo
Oct. 3 (UPI) -- Celebrity Kim Kardashian agreed on Monday to pay the Securities and Exchange Commission $1.26 million in penalties for promoting a cryptocurrency on her popular Instagram account without disclosing how much she was paid for the endorsement.
Kardashian, star of the former E! Network reality show Keeping Up With the Kardashians, has been a wildly successful social media promoter with a following of more than 300 million on Instagram.
The SEC charged that she failed to disclose on the platform that her promotion of the EMAX tokens and link to the EthereumMax website was paid for. An SEC statement said Kardashian did not admit to breaking the law by agreeing to the settlement.
"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 in a statement. "We encourage investors to consider an investment's potential risks and opportunities in light of their own financial goals."
The SEC's order did find that Kardashian violated the anti-touting provision of the federal securities laws. She agreed to not promote any crypto asset securities for three years.
"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," Gurbir S. Grewal, director of the SEC's Division of Enforcement, said in a statement.
"Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information."