Kim Kardashian has been charged after failing to disclose a payment she received for touting a crypto asset on her Instagram account.
The SEC went public Monday morning with the decision.
"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,” Gary Gensler, chairman of the SEC, said in a news release.
“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,” Gensler added.
According to the SEC, the order “finds that Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens, the crypto asset security being offered by EthereumMax. Kardashian’s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.”
The reality TV star, who has not admitted or denied the findings, agreed to settle the charges by paying $1.26 million in penalties and cooperate with an investigation.
According to the regulator, Kardashian has also agreed not to promote crypto securities for three years.
Not disclosing that she was paid $250,000 was a violation of federal securities laws, according to the SEC.
The payment she made included $260,000, which includes the payment she received, plus interest, in addition to the $1 million penalty.
Gurbir Grewal, director of the SEC’s division of enforcement, added:
“The federal 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."
"Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”
Kardashian is best known for her work on Keeping Up with the Kardashians.
She has amassed millions of followers on social media and can currently be seen on Hulu's The Kardashians.
Paul Dailly is the Associate Editor for TV Fanatic. Follow him on Twitter.