American socialite, Kim Kardashian has found herself in waterloo with the police over an Instagram post promoting a cryptocurrency asset that has been blasted by critics as a “pump and dump” scheme.
The Securities and Exchange Commission announced on Monday, October 3, 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 Kim K “agreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate” with the ongoing investigation.
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Kim 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.
A spokesperson for Kardashian told The Post:
“Ms. Kardashian is pleased to have resolved this matter with the SEC.
“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 spokesperson said.
“The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits.”
According to the feds, Kim Kardashian “failed to disclose” that she was paid $250,000 to promote EMAX crypto tokens, the digital coin that was offered for sale by EthereumMax.
Kim had posted on Instagram that she is “just sharing what friends told” her about the crypto tokens, without admitting it was a paid promo.
“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.”
Earlier this year, Kim Kardashian and former boxer Floyd Mayweather were named in a lawsuit alleging they misled their online followers into buying cryptocurrency as part of a “pump and dump” scheme. Former Boston Celtics star Paul Pierce was also named in the suit.