Breaking News
Investing Pro 0
Cyber Monday SALE: Up to 54% OFF InvestingPro+ CLAIM OFFER

Kim Kardashian pays $1.26 million fine for paid crypto ad, SEC says

Economy Oct 03, 2022 02:07PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Kim Kardashian arrives on the red carpet for the annual White House Correspondents' Association Dinner in Washington, U.S., April 30, 2022. REUTERS/Tom Brenner
 
TWTR
+0.00%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Doina Chiacu, Manya Saini and John McCrank

WASHINGTON (Reuters) -Kim Kardashian has promoted everything from appetite-suppressing lollipops to melon-flavored liqueur to toilet paper, but it was her foray into the murky world of cryptocurrencies that got her into hot water.

The reality television star and influencer has agreed to settle charges of unlawfully touting a crypto security and to pay $1.26 million in penalties and fees, the U.S. Securities and Exchange Commission said on Monday.

Kardashian, who has 330 million followers on Instagram and 73.7 million followers on Twitter (NYSE:TWTR), failed to disclose that she was paid $250,000 by crypto company EthereumMax to publish an Instagram post about its EMAX tokens, the SEC said.

The SEC in November 2017 warned celebrities looking to cash in on the emerging digital asset space that U.S. rules require they disclose when they are being paid to endorse crypto tokens.

Since then it has pursued a handful of other celebrities, including action film star Steven Seagal, music producer "DJ Khaled" and boxer Floyd Mayweather Jr. for breaking that rule, but Kardashian is arguably the most high profile.

Her post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens. "Sharing what my friends just told me about the EthereumMax token!" the post read.

Under U.S. law, people who tout a certain stock or crypto security need to disclose not only that they are getting paid to do so, but also the amount, the source and the nature of those payments, SEC Chair Gary Gensler said on Monday.

"This was really to protect the investing public - when somebody is touting that stock and whether that's a celebrity or an influencer or the like, and that's at the core of what this is about," Gensler said in an interview with CNBC.

"I want to acknowledge Miss Kardashian cooperating and ongoing cooperation. We really appreciate that," Gensler added.

Kardashian has agreed to pay the charge without admitting or denying the SEC's findings. Her lawyer Michael Rhodes said Kardashian was pleased to have resolved the case.

"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," Rhodes said in a statement.

ONGOING LAWSUIT

Kardashian is also named, along with boxer Mayweather and former basketball star Paul Pierce, in an ongoing lawsuit filed in January by investors who allege they suffered losses after the celebrities promoted EMAX.

EMAX tokens have declined around 98% since June 13, 2021, when Kardashian posted about them on Instagram to her then 225 million followers, according to the website CoinMarketCap.com.

Last month, Kardashian, who has expanded her footprint in the world of finance, launched a new private equity firm focused on investing in consumer and media businesses.

Regulating cryptocurrency markets has been high on the SEC chair's agenda this year, as prices of digital assets suffer wild swings due to heightened recession fears, rising interest rates and geopolitical turmoil.

Kim Kardashian pays $1.26 million fine for paid crypto ad, SEC says
 

Related Articles

Marketmind: Powell point presentation
Marketmind: Powell point presentation By Reuters - Nov 29, 2022

By Jamie McGeever (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever. Federal Reserve Chair Jerome Powell could set the market tone for the rest of the year...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
G D
G D Oct 03, 2022 3:13PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Ban crypto already
Lawrenti Berija
Lawrenti Berija Oct 03, 2022 1:17PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
i can clearly hear Elon laughing
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email