Kim Kardashian has agreed to fork over $1.26 million as part of a settlement with the Securities and Exchange Commission after she posted a cryptocurrency ad to Instagram in 2021. Kardashian, who’s worth $1.8 billion, won’t admit wrongdoing but has agreed not to promote any crypto for the next three years, according to an SEC press release.
Kardashian published the promotion to Instagram in June of 2021, and even included a hashtag noting it was an ad.
“ARE YOU INTO CRYPTO??? THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN,” the extremely shouty ad on Instagram read.
“A FEW MINUTES AGO ETHEREUM MAX BURNED 400 TRILLION TOKENS- LITERALLY 50% OF THEIR ADMIN WALLET GIVING BACK TO THE ENTIRE E-MAX COMMUNITY,” Kardashian’s ad continued.
The price of the crypto token soared 632% after Kardashian and other celebrities like boxer Floyd Mayweather and basketball player Paul Pierce promoted it. But the coin eventually plummeted, leaving buyers with a worthless coin.
And while Kardashian noted it was an ad in her Instagram post, that wasn’t enough to appease regulators, who say that Kardashian should have told consumers precisely how much she was getting for the ad.
The head of the SEC, Gary Gensler, even published a video on YouTube and Twitter explaining why the federal agency cares about celebrity endorsements of crypto and other securities.
“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 S. Grewal, Director of the SEC’s Division of Enforcement, said in a statement.
“Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information,” Grewal continued.
How much was Kardashian actually paid for the ad? The billionaire received $250,000, all of which she’ll repay with an additional $10,000 interest. The $1 million on top of that is presumably meant to dissuade Kardashian from doing this ever again after her three-year hiatus.