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Kim Kardashian Settles SEC Charges Over EthereumMax Instagram Crypto Promo


Reality TV star Kim Kardashian has launched a private equity fund, Skky Partners, which she co-founded with Jay Sammons, a former partner at investment firm Carlyle Group.

Photo by James Devaney/GC Images via Getty Images

Kim Kardashian’s crypto mishap landed her in hot water with federal regulators.

The reality TV superstar and influencer has settled Securities and Exchange Commission charges that she failed to disclose a payment she received for touting a crypto asset on her Instagram feed, the agency has announced. Monday morning.

“This case reminds us that when celebrities or influencers endorse investment opportunities, including crypto asset securities, it does not mean that those investment products are suitable for all investors,” said Gary Gensler. , Chairman of the SEC, in a press release. .

Kardashian, reportedly worth $1.8 billion, has agreed to pay $1.26 million to settle costs related to an Instagram promotion by Meta for the EthereumMax crypto asset, the SEC said. It will also cooperate with an ongoing investigation and has agreed not to promote crypto securities for three years, the regulator added.

However, Kardashian, who has built a media and lifestyle empire, has neither admitted nor denied the regulator’s findings, the SEC said.

In a statement, a Kardashian lawyer said she was happy to have solved the case.

“Kardashian has cooperated fully with the SEC from the outset and she remains willing to do whatever she can to help the SEC with this matter. She wanted to put this matter behind her to avoid a protracted dispute. The agreement she entered into with the SEC allows it to do so so that it can move forward with its many different business activities,” the statement read.

Kardashian has already felt regulatory pressure over her EthereumMax promo, which she posted on Instagram in June last year. She began the post by asking her roughly 250 million Instagram followers, “ARE YOU INTO THE CRYPTO???

Investors sued her, former NBA star Paul Pierce and superstar boxer Floyd Mayweather Jr. earlier this year over their promotions for EthereumMax, accusing them of artificially inflating the value of the asset.

The SEC said Monday that Kardashian failed to report that she was paid $250,000 by EthereumMax, through an intermediary, to publish an article about EMAX tokens, a crypto asset offered by EthereumMax. The post, which featured the “#ad” hashtag, included a link to the EthereumMax website, which gives users instructions on how to purchase the tokens, the regulator added.

His failure to disclose the payment constituted a violation of federal securities laws, the SEC said. She agreed to pay $260,000, which includes the payment she received, plus interest, in addition to the $1 million penalty, the agency added.

“Congress passed a law decades ago called the Securities Act, and that was to protect the public,” Gensler told CNBC’s “Squawk Box” Monday morning. “Part of that law said if you’re bragging about an action, you must disclose if you’re getting paid.”

Read the SEC’s settlement order here.

– CNBC’s Jack Stebbins contributed to this report.

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