Kim Kardashian has to pay a $1.26 million fine for touting a crypto currency

Attorney-in-training and SKIMS entrepreneur Kim Kardashian has agreed to pay $1.26 million to the US Securities and Exchange Commission in order to settle charges that she promoted a cryptocurrency on Instagram without disclosing that she’d been paid $250,000 for the promotion.

The Kardashians star promoted EMAX tokens, sold by Ethereum Max, in her IG Stories, which included a link to an external website instructing visitors on how to buy the cryptocurrency. The SEC dropped a video today on social media explaining why the fine against the reality TV star was an important cautionary tale. 

Gary Gensler, chair of the SEC, spoke directly to camera in the video shared to his official Twitter account, and the official SEC Twitter account also reported on the news.

“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 said. 

 In their statement, the SEC revealed that Kim neither agreed to or denied the charges against her, but in the settlement, she has agreed to not post about cryptocurrencies or other asset securities in her feed for a period of three years. 

In June 2021, Kim wrote in her IG Stories, “Are you guys into crypto???? This is not financial advice but sharing what my friends just told me about the Ethereum Max token!” Her post included the hashtag “#AD,” but it is not fully clear why that wasn’t sufficient to avoid SEC charges. The SEC says she violated the anti-touting provision of federal securities laws.

According to Bloomberg, Ethereum Max has suffered a massive 98% wipeout of its total value since May 2021.

Speaking with Variety, Kim’s legal team stated, “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.”

The $1.26 million fine (which includes a $1 million penalty and what she was paid for the post plus interest)  is over 5 times what she was originally paid by Ethereum for the post, so this racks up to a costly mistake, but as many have pointed out on Twitter, this will hardly put a dent in the Keeping Up With The Kardashians star’s net worth. In fact, as one user posited, she probably made all that money back in the time it took the SEC to post their video.