Kim Kardashian is paying $1.26 million in a settlement agreement with the Securities and Exchange Commission.
Kim Kardashian is paying $1.26 million in a settlement agreement with the Securities and Exchange Commission amid charges that she unlawfully touted a cryptocurrency without disclosing she was being paid for the promotion.
Kardashian is paying the settlement without admitting to or denying the SEC's findings, the agency said on Monday. She also agreed to not promote any crypto asset securities for three years.
The agency said Kardashian will cooperate in its ongoing investigation.
The fine is linked to a cryptocurrency called EthereumMax, or EMAX, which was pitched to investors as a disruptive new cryptocurrency. Kardashian was one of several celebrities who used their fame to hype the crypto asset, and who were the focus of a class-action lawsuit in January over their endorsements.
The SEC said Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens. Kardashian's post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.
"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," Gurbir Grewal, director of the SEC's division of enforcement, said in a prepared statement.
The SEC said Kardashian's settlement includes about $260,000 in disgorgement, covering the amount she earned from promoting the cryptocurrency plus interest, as well as a $1 million penalty.
Kardashian's lawyer said in a statement, "Ms. Kardashian is pleased to have resolved this matter with the SEC. Kardashian fully cooperated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter. She wanted to get this matter behind her to avoid a protracted dispute. The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits."
This story was originally published by CBS News on Oct. 3, 2022, with reporting by the Associated Press.
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