Kim Kardashian has agreed to hand over $US1.26 ($AU1.93) million as part of a settlement with the Securities and Exchange Commission over a cryptocurrency ad she posted to Instagram in 2021. Kardashian, who’s worth $US1.8 ($AU2.76) billion, won’t admit wrongdoing but has agreed not to promote any crypto for the next three years, according to an SEC press release.
Kardashian published the promotion to Instagram in June of 2021, and even included a hashtag noting it was an ad.
“ARE YOU INTO CRYPTO??? THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN,” the extremely shouty ad on Instagram read.
“A FEW MINUTES AGO ETHEREUM MAX BURNED 400 TRILLION TOKENS- LITERALLY 50% OF THEIR ADMIN WALLET GIVING BACK TO THE ENTIRE E-MAX COMMUNITY,” Kardashian’s ad continued.
The price of the crypto token soared 632% after Kardashian and other celebrities like boxer Floyd Mayweather basketball player Paul Pierce promoted it. But obviously, the coin eventually plummeted, as pump and dump schemes always do, leaving people with a worthless coin.
And while Kardashian noted it was an ad in her Instagram post, that wasn’t enough to appease regulators, who say that Kardashian should have told consumers precisely how much she was getting for the ad.
“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,” Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, said in a statement.
“Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information,” Grewal continued.
How much was Kardashian actually paid for the ad? The billionaire received $US250,000 ($AU383,725), all of which she’ll repay with an additional $US10,000 ($AU15,3492) interest. The $US1 ($AU1.53) million on top of that is presumably meant to dissuade Kardashian from doing this ever again after her three-year hiatus.