(NewsNation) — Kim Kardashian has agreed to pay $1.26 million to settle Securities and Exchange Commission charges that she promoted a cryptocurrency on Instagram without disclosing she’d been paid $250,000 to do so.
The SEC said Monday that the reality TV star and entrepreneur has agreed to cooperate with its ongoing investigation.
In a new public video, SEC Chairman Gary Gensler aims to strip some influence from celebrity influencers.
“Celebrities and influencers often are endorsing a variety of products and services across television ads, social media or print. We always wondered do they use the product? Do they like the product? How much were they paid to endorse it?” Gensler said.
The SEC said Kardashian failed to disclose that she was paid to publish a post on her Instagram account about EMAX tokens, a crypto asset security being offered by EthereumMax.
Kardashian’s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.
The celebrity model and businesswoman is among the platform’s top ten with more than 330 million followers. Many may have invested, and with cryptocurrencies now down, there could be more fallout with possible civil suits.
“I’m a consumer and Kim Kardashian comes out and she touts this crypto and I invest all my money in it. Can I then personally go after her for fraud, misrepresentation, whatever it is?” Tre Lovell, an attorney, asks on NewsNation’s “Rush Hour” on Monday.
That answer, he says, is yes.
“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 Grewal, director of the SEC’s division of enforcement, said in a prepared statement.
Kardashian has agreed to not promote any crypto asset securities for three years.
“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 agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits,” a lawyer for Kardashian said in a statement.
While Kardashian is well known for reality TV, currently appearing on “The Kardashians” on Hulu, she is also a successful businesswoman. Her brands include SKIMS, which has shapewear, loungewear and other products, and a skin care line called SKKN.
Cryptocurrency is facing increasing attention from Congress. The latest bipartisan proposal came in August from Sens. Debbie Stabenow, D-Mich., and John Boozman, R-Ark. It would hand the regulatory authority over Bitcoin and Ether to the Commodities Futures Trading Commission.
Bills proposed by other members of Congress and consumer advocates have suggested giving the authority to the Securities and Exchange Commission.
This year, crypto investors have seen prices plunge and companies crater with fortunes and jobs disappearing overnight, and some firms have been accused by federal regulators of running an illegal securities exchange.