Kim Kardashian Owes $1.26M For Botched Crypto Endorsement

CALABASAS, CA — Media-turned-business mogul Kim Kardashian owes $1.26 million to settle federal charges related to a bungled crypto endorsement, the U.S. Securities and Exchange Commission announced Monday.

Kardashian posted an endorsement of a crypto asset sold by EthereumMax without disclosing she was paid $250,000 to do so, the SEC claimed. Kardashian violated the anti-touting provision of the federal securities laws, according to SEC.

"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," said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. "Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information."

Kardashian agreed to the settlement without admitting or denying the investigations' findings, according to the SEC. Kardashian also agreed to not promote any crypto assets for three years, according to the SEC.

The investigation continues after Kardashian's settlement, according to the SEC.

"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," said SEC Chair Gary Gensler. "We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals."

The promotion in question was posted to Instagram in June, 2021, and it has already caused the megastar headaches, CNBC reported. Investors sued Kardashian and other investors over the promotions earlier this year.

According to CNBC, the post read: "ARE YOU INTO CRYPTO??? THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN." The post also included a link to the EthereumMax website, according to the SEC.

The post included the #ad, but Gensler told CNBC that was not enough.

"If you're advertising perfume or you're advertising vacation homes or anything else on the internet, there are various laws related to that. But these are the securities laws — and [with] those other laws, it might be appropriate to just say #ad," Gensler told CNBC. "But in the securities laws, Congress put in place that you have to disclose not only that you're getting paid, but the amount, nature of it. And this was really to protect the investing public when somebody is touting a stock."