Media personality Kim Kardashian to pay US$1.2 million for promoting one of the crypto securities

According to a press release from the Securities and Exchange Commission (SEC), influencer and socialite Kim Kardashian was charged with allegedly promoting one of the crypto securities called EthereumMax. To avoid a protracted dispute, Kim Kardashian has to pay US$1.2 million in penalties to the Securities and Exchange Commission to settle charges that she illicitly touted a cryptocurrency token on social media without disclosing how much she was paid for the promotion, the SEC said Monday.

Kardashian's post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens. The crypto 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.

Kim Kardashian and Crypto: What went wrong?

She included in the post a disclaimer that she was not offering financial advice, as well as the hashtag #AD, an F.T.C.-endorsed indication that the post was a paid advertisement. The S.E.C. said that disclosure didn't comply with a decades-old agency rule governing the promotion of investment opportunities. Kardashian's big mistake: She left out when she was paid — $250,000 — to promote the token.

"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," SEC Chair Gary Gensler said in a statement. "We encourage investors to consider an investment's potential risks and opportunities in light of their own financial goals."