Reality TV star Kim Kardashian has agreed to pay $1.26 million to settle charges she promoted cryptocurrency on social media without disclosing that she was paid to do it, the Securities and Exchange Commission said Monday.
The SEC said Ms. Kardashian failed to let followers know she was paid $250,000 to post on her Instagram account about EthereumMax and link to its website, which told potential investors how to buy EMAX tokens.
“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 Chairman Gary Gensler said. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
The SEC said Ms. Kardashian violated anti-touting provisions of federal securities laws.
Ms. Kardashian agreed to pay to settle the charges without admitting or denying the SEC findings.
The $1.26 million payment includes a $1 million penalty and about $260,000 in disgorgement, which represents her promotional payment, and prejudgment interest.
The SEC warned Americans not to make investment decisions based solely on recommendations by celebrities.
High-profile endorsements of cryptocurrency, in particular, have been met with skepticism because the digital assets have had a shaky year.
Ms. Kardashian, often called “famous for being famous,” is a constant media presence and known for taping a reality television show with her family and a yearslong marriage to rapper Kanye West, which ended in divorce.