Kim Kardashian has landed in hot water with the feds over an Instagram post promoting a cryptocurrency asset that has been blasted by critics as an alleged “pump and dump” scheme.
The Securities and Exchange Commission announced on Monday that it has charged the reality television star and social media influencer “for touting on social media a crypto asset security…without disclosing the payment she received for the promotion.”
The SEC said that Kim K “agreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate” with the ongoing investigation.
Kardashian paid the penalties “without admitting or denying the SEC’s findings,” according to the agency. She also agreed to refrain from promoting any crypto asset securities for three years, the government said.
According to the feds, Kardashian “failed to disclose” that she was paid $250,000 to post an item to her tens of millions of Instagram followers touting EMAX crypto tokens, the digital coin that was offered up for sale by EthereumMax.
“Kardashian’s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens,” the SEC said in a statement.
“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.
“We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
“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.”