Reality star and social media influencer Kim Kardashian was fined $1.26 million by the Securities and Exchange Commission (SEC) for failing to mention that she was paid to endorse EMAX tokens when she posted it on her Instagram (IG) account in June 2021.
Kardashian was paid $250,000 to publish an Instagram post to her 228 million followers about EMAX tokens, the crypto asset security offered by EthereumMax. Her post included a link to the EthereumMax website, which offered potential investors purchase information.
“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 in a Monday (Oct. 3) press release.
A lawsuit was filed against Kardashian, former NBA star Paul Pierce and boxing champion Floyd Mayweather in January for allegedly making false and misleading statements while promoting EthereumMax, PYMNTS reported in January.
The lawsuit filed in a California federal court by an investor claimed the cryptocurrency was a pump-and-dump scam. The class-action suit accuses the celebrities of “collaborating” with the executives to “misleadingly promote and sell the digital asset associated with EthereumMax.”
Mayweather last week asked the court to dismiss the case based on unsupported claims.
Unrelated to the lawsuit, the SEC’s own investigation concluded that Kardashian violated the anti-touting provision of federal securities laws.
Although she didn’t admit or deny the findings or charges by the SEC, Kardashian agreed to pay the fine, which includes her promotional payment, prejudgment interest, and a $1 million penalty, according to the release.
Kardashian also agreed to not promote any crypto asset securities for three years.
PYMNTS has reached out to Kardashian’s representatives for comment.