Kim Kardashian has agreed to pay a $1.26m (£1.12m) fine for advertising EthereumMax on her Instagram page.
The US Securities and Exchange Commission said the reality TV star had received $250,000 for advertising the cryptocurrency, without disclosing she had been paid to do so.
The Securities and Exchange Commission announced on Monday that it has charged the reality television star and social media influencer “for touting on social media a crypto asset security … without disclosing the payment she received for the promotion.”
The SEC said Kim K “agreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate” with the ongoing investigation.
On June 14, 2021, Kim Kardashian promoted a little-known crypto company called EthereumMax to her 225 million Instagram followers.
“Are you guys into crypto?”
she asked.
A week later, the price of EthereumMax, or EMAX , had fallen 50% and the volume of trade in the token had dropped by nearly 75%.
The price of the coin never recovered, so anyone who followed Kardashian’s advice lost a bundle.
The reality show star’s post was the last of several celebrity endorsements EMAX had relied upon to drive up the price of the coin they had released in May 2021, according to a class-action lawsuit filed in federal court in California by numerous investors.
The suit claims that the company’s founders made big profits after cashing out as prices jumped following online endorsements by Kardashian, former NBA star Paul Pierce and retired boxing champ Floyd Mayweather.
Speaking on behalf of the reality star, a spokesperson told the NY Post, "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."