Kim Kardashian, who is charged with violating federal securities laws, has agreed to pay a $1 million fine to the S.E.C.
The top financial regulator in the United States has charged celebrity Kim Kardashian for promoting a cryptocurrency on her Instagram account without declaring that she was compensated for the promotion.
Kardashian agreed to pay a $1 million fine to the Securities and Exchange Commission on Monday, while she did not confirm or reject the S.E.C.’s allegations. She will also return $260,000, which includes her corporate payout plus interest.
In a formal release issued on Monday, the SEC noted that The Kardashians star, 41, “agreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate with the Commission’s ongoing investigation” without admitting or denying the SEC’s findings.
“The case of Ms. Kardashian also serves as a reminder to celebrities and others that the law compels them to disclose to the public when and how much they are paid to encourage investment in securities,” said SEC head Gary Gensler.
Kardashian, who has around 330 million Instagram followers, was paid $250,000 to promote EthereumMax’s cryptocurrency called EMAX tokens.
As more and more celebrities promote products online, regulators have started to take a closer look to make sure that they’re following rules.
The Federal Trade Commission, for instance, has cracked down on celebrities and social media influencers who don’t adequately disclose their connections or that they are paid by the products they promote.
Two years ago, the FTC fired off warning letters to several Internet influencers and celebrities, like the recording artists Cardi B and Jordin Sparks, reminding them of their legal obligation to disclose their connections to the products they promote.
While Kardashian didn’t admit or deny the SEC’s findings, in an agreement with the regulator, she agreed to not promote any crypto asset securities for three years.