Kim Kardashian has agreed to pay $1.26 million to the Securities and Exchange Commission to settle charges against her.
It came after Kim was charged with “touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion.”
The SEC released a statement where they alleged what Kim did wrong and urged investors to be cautious.
Kim said that she wasn’t giving her fans financial advice but simply passing along some insight her friends had shared with her.
Although she added #ad in her hashtags, the SEC said she failed to disclose how much she made for the post.
SEC Chair speaks out about Kim Kardashian’s case
The SEC Chair, Gary Gensler, said yesterday, “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.”
He also reminded the public to do their due diligence when they see influencers or celebrities posting about investment opportunities.
He said that it was important to consider both the risks and the benefits in any investment.
A social media user made fun of Kim with a “How it started vs. how it’s going” poster, which showed her initial ad and the SEC charges.
Why Kim Kardashian had to pay $1.26 million
The Kardashians star could have argued she was abiding by the rules by disclosing her post as an advertisement and not financial advice.
However, the SEC said its rules go beyond that when it comes to crypto, and Kim’s mistake was that she failed to disclose how much she was being paid for the endorsement.
The Director of the SEC’s Division of Enforcement, Gurbir S. Grewal, said, “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.”
Kim agreed to settle the civil charges against her by paying $1.26 million, which forfeits the $250,000 that she got paid for the post and includes a penalty of $1 million, including interest.
She is also prohibited from promoting any crypto asset securities for the next three years. However, the settlement means the civil case against her has now been dropped. It also means that she has neither admitted nor denied the charges that were made against her.
The Kardashians airs Thursday on Hulu.More: Keeping Up with the Kardashians, The Kardashians