The Securities and Exchange Commission accused American reality star Kim Kardashian of failing to reveal that she received $250,000 in exchange for touting a crypto asset on Instagram. She agreed to pay the fine and assist with the SEC's ongoing investigation.

After promoting a cryptocurrency asset called EthereumMax on Instagram, Kardashian agreed to pay a $1.26 million fine to resolve civil claims.

"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. "We encourage investors to consider an investment's potential risks and opportunities in light of their own financial goals."

According to the SEC, Kardashian broke the federal securities laws' anti-touting clause. Kardashian accepted the decision without contesting or confirming the SEC's findings. Kardashian also consented to refrain from endorsing any cryptocurrency securities for three years. A $1 million fine and the forfeiture of the $250,000 money she received, plus interest, are also part of the settlement agreement.

"Ms. Kardashian is pleased to have resolved this matter with the SEC," her attorneys said. "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."

According to Charles Whitehead, a professor at Cornell Law School, the SEC may have chosen to target Kardashian in order to send a message to other influencers who might be pushing cryptocurrencies or other investment products. He described it as a "shot across the bow" for famous cryptocurrency promoters.

"It's a way to signal to other influencers: if you're thinking about dealing with crypto, think twice," Whitehead said. "The SEC is also using her as an influencer - but to boost compliance with securities laws. [It's a] smart way to bring attention to the matter so others won't do it."

"Are you guys into crypto?" Kardashian said in an Instagram post from June 13, 2021. "This is not financial advice but sharing what my friends told me about the ethereum max token!" She added other hashtags, such as #ad, #emax, and #disrupthistory, among others, to her post.

At the time of the post, according to the SEC, she had 225 million Instagram followers. Gensler stated in an interview with CNBC on Monday that the #ad is insufficient to abide by SEC regulations about promoting investments.

"If you're advertising perfume, or you're advertising vacation homes or anything else on the internet, there are various laws related to that. But these are the securities laws," he said.

The Securities and Exchange Commission accused American reality star Kim Kardashian of failing to reveal that she received $250,000 in exchange for touting a crypto asset on Instagram. She agreed to pay the fine and assist with the SEC's ongoing investigation.
After promoting a cryptocurrency asset called EthereumMax on Instagram, Kardashian agreed to pay a $1.26 million fine to resolve civil claims.

“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. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”

According to the SEC, Kardashian broke the federal securities laws' anti-touting clause. Kardashian accepted the decision without contesting or confirming the SEC's findings. Kardashian also consented to refrain from endorsing any cryptocurrency securities for three years. A $1 million fine and the forfeiture of the $250,000 money she received, plus interest, are also part of the settlement agreement.

“Ms. Kardashian is pleased to have resolved this matter with the SEC,” her attorneys said. “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.”

According to Charles Whitehead, a professor at Cornell Law School, the SEC may have chosen to target Kardashian in order to send a message to other influencers who might be pushing cryptocurrencies or other investment products. He described it as a "shot across the bow" for famous cryptocurrency promoters.

“It’s a way to signal to other influencers: if you’re thinking about dealing with crypto, think twice,” Whitehead said. “The SEC is also using her as an influencer – but to boost compliance with securities laws. [It’s a] smart way to bring attention to the matter so others won’t do it.”

"Are you guys into crypto?" Kardashian said in an Instagram post from June 13, 2021. "This is not financial advice but sharing what my friends told me about the ethereum max token!” She added other hashtags, such as #ad, #emax, and #disrupthistory, among others, to her post.

At the time of the post, according to the SEC, she had 225 million Instagram followers. Gensler stated in an interview with CNBC on Monday that the #ad is insufficient to abide by SEC regulations about promoting investments.
“If you’re advertising perfume, or you’re advertising vacation homes or anything else on the internet, there are various laws related to that. But these are the securities laws,” he said.