Better say if you got paid.
Kim Kardashian agreed to settle charges from the Securities and Exchange Commission, agreeing to pay $1.3 million after she touted EthereumMax crypto on social media, but failed to disclose that she was paid $250,000 for the post.
Influencers are supposed to acknowledge when they are being paid to make a post and authorities are sending the message that they take those rules seriously, especially when it comes to potential investments.
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The post included a link to the EthereumMax website, where there were instructions on how to buy EMax tokens.
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Kardashian did not admit nor deny the SEC’s findings, but agreed to pay $260,000 in disgorgement — covering the payment share received as well as interest — and a $1 million penalty. The influencer also agreed to not promote any cryptos for three years.
Gary Gensler, SEC chair, said: “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. 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,” Gensler said.
Gurbir S. Grewal, director of the SEC’s enforcement division, added: “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. Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”
If the SEC is looking to send a message, Kardashian makes sense as a high-profile target.
Not only is she a mega influencer on social media, she is nearly omnipresent with her reality TV show, modeling gigs, her brand Skims and regular appearances in the gossip pages.