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Kim K. Settles with SEC for Failing to Disclose Compensation for Pushing Crypto

Reality television star Kim Kardashian has been charged by the Securities and Exchange Commission (SEC) for touting cryptocurrency without disclosing her compensation, and as a result of the accusations has agreed to pay more than $1 million to settle the matter.

The SEC said Kardashian did not disclose a $250,000 payment she received to publish information on her Instagram page regarding a crypto “asset security” sold by EthereumMax. She will now pay $1.26 million in penalties, interest and disgorgement and will also have to cooperate with an ongoing investigation into the matter.

“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 Chairman Gary Gensler, in a statement. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”

The Instagram post in question included a link to the EthereumMax website with instructions on how to purchase the tokens, according to information from the SEC. “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 added.

From Twitter

Greenwood Holding Company @mjgreeninc 

"You label something a security without giving them an opportunity to defend themselves and without giving any clear guidelines supported by law. The way we see it, the greatest threat is not #KimKardashian. It’s a [rogue] agency like @GaryGensler @SECGov. #GaryGenslerResign"

Per Forbes, Kardashian checks in at a net worth of $1.8 billion and is 16th on the list of the publication’s “2022 America’s Self-Made Women” rankings. In addition to reality television, Kardashian has also amassed wealth selling games, shapewear and other cosmetics. In 2020, notes the finance resource, Kardashian sold a 20% share of her KKW Beauty $200 million.

The SEC’s investigation is under the guidance of Jon A. Daniels, Alison R. Levine and Pamela Sawhney, who all work in the Enforcement Division’s Crypto Assets and Cyber Unit. Additionally, Kerri Palen, Lisa Knoop and Victor Suthammanont of the New York Regional Office are also participating in the continuing investigation, notes the commission. The matter was supervised by Carolyn Welshhans and Mark R. Sylvester of the Crypto Assets and Cyber Unit.

From Twitter

investor Weekly @investorWeekly1

"The #SEC is a nightmare. They pretend to protect investors but they don’t. They just try and control this outdated financial system with laws from 1933. #investors #KimKardashian' 

“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,” said Gurbir S. Grewal, director of the SEC’s Division of Enforcement, in a statement. “Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”

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