Kim Kardashian's influencing has gotten her in trouble. The star has agreed to pay millions of dollars to the U.S. Securities and Exchange Commission after illegally promoting EthereumMax.
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The SEC unveiled the charges on Monday, 3 September, detailing that the entertainment mogul advertised on her social media "a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion."
As a result, she has agreed to pay $1.26 million in penalties, disgorgement and interest. Kim also has to cooperate with the SEC in their ongoing investigation into the cryptocurrency platform.
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Per the SEC: "Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens, the crypto asset security being offered by EthereumMax."
In her post, she directed her whopping 330 million followers to a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.
The SEC maintained that: "Kardashian violated the anti-touting provision of the federal securities laws."
© Photo: Getty ImagesThe star was most recently in Milan debuting her new collection with Dolce & Gabbana
Though she neither admitted to or denied any wrongdoing and did not confirm the SEC's findings, Kim agreed to settle by paying the aforementioned $1.26 million which includes "approximately $260,000 in disgorgement, which represents her promotional payment, plus prejudgment interest, and a $1,000,000 penalty."
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Additionally, the reality star will not be allowed to promote any crypto asset securities for three years.
Kim recently announced her latest venture, SKKY, a "next generation consumer & media private equity firm"
"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. We encourage investors to consider an investmen's potential risks and opportunities in light of their own financial goals," said SEC chair Gary Gensler.
He added: "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."
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