Kim Kardashian is paying a large penalty after facing legal trouble.
On Oct. 3, the Securities and Exchange Commission announced charges against the SKIMS mogul for "touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion." According to a press release for the SEC, Kim—"without admitting or denying the SEC's findings"—agreed to settle the charges, as well as pay $1.26 million in penalties, disgorgement and interest.
"Ms. Kardashian is pleased to have resolved this matter with the SEC," Kim's lawyer tells E! News. "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 SEC's order found that Kim had failed to disclose that she was paid $250,000 to promote EMAX tokens, the crypto asset security being offered by EthereumMax, on her Instagram account.
"This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn't mean that those investment products are right for all investors," SEC Chair Gary Gensler said in the press release. "We encourage investors to consider an investment's potential risks and opportunities in light of their own financial goals."
Added Gensler, "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."
Gurbir S. Grewal, the director of the SEC's Division of Enforcement, also addressed the nature of the case against Kim.
"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," he said. "Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information."
According to the SEC's press release, Kim's $1.26 million fee for "violated the anti-touting provision of the federal securities laws," includes approximately $260,000 in disgorgement, representing her promotional payment, plus prejudgment interest, as well as a $1,000,000 penalty. Kim has also agreed to not promote any crypto asset securities for three years.