Kim Kardashian has landed in hot water with the authorities over an Instagram post promoting a cryptocurrency asset that has been blasted by critics as an alleged “pump and dump” scheme.
The US Securities and Exchange Commission announced 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 that Kim K “agreed to settle the charges, pay $1.26 million ($1.94 million AUD) in penalties, disgorgement, and interest, and cooperate” with the ongoing investigation, the New York Post reported.
Kardashian paid the penalties “without admitting or denying the SEC’s findings,” according to the agency. She also agreed to refrain from promoting any crypto asset securities for three years, the government said.
A spokesperson for Kardashian said: “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.”
“She wanted to get this matter behind her to avoid a protracted dispute,” the spokesperson said.
“The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits.”
According to the authorities, Kardashian “failed to disclose” that she was paid $250,000 ($385,000 AUD) to post an item to her tens of millions of Instagram followers touting EMAX crypto tokens, the digital coin that was offered up for sale by EthereumMax.
“Kardashian’s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens,” the SEC said in a statement.
“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.”
“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.”
Earlier this year, Kardashian and former boxer Floyd Mayweather were named in a lawsuit alleging they misled their online followers into buying cryptocurrency as part of a “pump and dump” scheme.
Kardashian and Mayweather were accused of making “false or misleading statements” while promoting EMAX.
“In truth, Defendants marketed the EMAX Tokens to investors so that they could sell their portion of the Float for a profit,” the suit adds.
This story was originally published by the New York Post and was reproduced with permission
Originally published as Kim Kardashian pays $1.96 million after being charged over cryptocurrency scheme