Kim Kardashian to pay $1.26 million in crypto charges settlement
The U.S. Securities & Exchange Commission on Monday announced charges against Kim Kardashian for promoting a cryptocurrency without disclosing that she had been paid for the promotion. Kardashian has agreed to pay $1.26 million as part of a settlement.
The big picture: Federal securities regulators have been cracking down on celebrity crypto endorsements.
Details: Kardashian didn't disclose that she was paid $250,000 to publish an Instagram post about a crypto token called EMAX, in which Kardashian included a link to a related website and instructions for potential investors.
- Under terms of the settlement, Kardashian agreed to pay $260,000 in disgorgement (her payment plus interest) and a $1 million penalty. She also agreed to not promote any cryptocurrencies for the next three years.
- "Ms. Kardashian’s case 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," SEC chair Gary Gensler said in a statement.
- Kardashian and other celebrities, including boxer Floyd Meriwether and ex-NBA player Paul Pierce, previously were named as defendants in a civil suit related to promotion of EMAX tokens.
What she's saying: Kardashian's attorney said in an emailed statement: "Ms. Kardashian fully cooperated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter. 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."
The bottom line: The charges come just weeks after Kardashian agreed to co-found a consumer-focused private equity firm with a former Carlyle Group partner, which is said to be seeking over $1 billion for its debut fund.