Kim Kardashian will pay US$1.26 million to settle Securities and Exchange Commission allegations that she broke U.S. rules by touting a crypto token without disclosing she was paid for the promotion.
The SEC said Monday Kardashian was paid $250,000 to post on her Instagram account about EMAX tokens, a crypto asset offered by EthereumMax. Kardashian didn’t admit or deny the regulator’s allegations as part of the settlement, in which she agreed not to tout any digital assets for three years.
Wall Street’s main regulator has previously warned that celebrities touting cryptocurrencies it deems securities need to make clear to investors if they’re paid for the backing. In 2018, the regulator fined boxer Floyd Mayweather and music producer DJ Khaled for failing to disclose payments they received for hyping initial coin offerings.
The main difference between Kardashian’s settlement and earlier ones related to digital assets is the size of the penalty, said Coy Garrison, a partner at Steptoe & Johnson. “The higher penalty suggests that the SEC is taking a tougher stance against celebrities and believes that celebrities are on notice of their need to comply with the anti-touting provision of the securities laws with respect to crypto assets,” said Garrison, who used to work at the SEC.