Paid Advertising for Cryptos: Kim Kardashian Must Pay Millions in Fines

Hidden income in promoting a digital currency has cost Kim Kardashian a lot of money. The reality star will pay $1.26 million in fines and damages in a settlement with the U.S. Securities and Exchange Commission, the agency said Monday. She also agreed not to mine crypto assets for three years and to cooperate with an ongoing investigation.

The SEC said Monday that Kardashian failed to report receiving $250,000 from EthereumMax through an intermediary for publishing a notice about EMAX token, a crypto asset offered by EthereumMax. The post, which was tagged with the hashtag “#ad”, included a link to the EthereumMax website, which the regulator says provides instructions for users to purchase the tokens.

The SEC has been warning investors for years about dubious investment tips from high-reach celebrities on the internet — especially in the case of highly speculative and often laxly regulated crypto assets.

“This case reminds us that when a celebrity or influencer promotes investment opportunities — including cryptocurrencies — it does not mean that such investment products are right for all investors,” SEC chairman Gary Gensler said in a press release.

Kardashian himself said through a spokesperson: “Kardashian has cooperated fully with the SEC from the outset and remains willing to do whatever it takes to assist the SEC in this matter.” She wanted to settle this case to avoid a lengthy argument. “The settlement it has reached with the SEC allows it to do so so that it can continue its many diverse business activities,” the statement said.

In 2018, the US Securities and Exchange Commission had already fined boxing star Floyd Mayweather and hip-hop producer DJ Khaled for conducting unfair paid promotions for digital currency transactions on their social media channels. (lacquer/dab/sda/awp/dpa)