In response to allegations that she improperly promoted a cryptocurrency without disclosing she was being paid for the marketing, Kim Kardashian has agreed to pay $1.26 million as part of a settlement deal with the Securities and Exchange Commission.
According to the SEC, Kardashian is paying the settlement without acknowledging or disputing its conclusions. She also committed to refrain for three years from endorsing any crypto asset securities.
According to the agency, Kardashian will assist with its continuing inquiry.
A cryptocurrency by the name of EthereumMax, or EMAX, which was promoted to investors as a revolutionary new cryptocurrency, is associated with the fine. A class-action lawsuit was filed in January against a number of celebrities, including boxer Floyd Mayweather, retired NBA player Paul Pierce, and reality TV star Kim Kardashian, for their support of cryptocurrencies.
According to the SEC, Kardashian did not disclose that she received $250,000 in exchange for posting about EMAX tokens on her Instagram account. Kardashian’s post included a link to the EthereumMax website, where prospective investors could find instructions on how to buy EMAX tokens.
“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 Grewal, director of the SEC’s division of enforcement, said in a prepared statement.
According to the SEC, Kardashian’s settlement includes a $1 million fine, as well as $260,000 in disgorgement, which will repay the money she made from marketing the cryptocurrency plus interest.