This is the Instagram post that got Kim Kardashian in hot water with the SEC — leading to a $1.26 million settlement payment
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- Kim Kardashian agreed to pay $1.26 million to settle charges related to a crypto ad, the SEC said.
- Kardashian failed to disclose how much she was paid to promote a crypto asset on Instagram.
- See the post that got Kardashian in trouble below.
Kim Kardashian recently found herself in hot water with the Securities and Exchange Commission by posting this story to her 330 million Instagram followers in June 2021.
"Are you guys into crypto????," said the post, which had a link to the EthereumMax website. "This is not financial advice but sharing what my friends just told me about the Ethereum Max token! A few minutes ago Ethereum Max burned 400 trillion tokens — literally 50% of their admin wallet giving back to the entire E-Max community."
The SEC said on Monday that Kardashian failed to disclose how much she was paid for the Instagram post promoting EMAX tokens, a crypto asset sold by EthereumMax, in violation of federal securities laws.
What got Kardashian in trouble is that she only included the hashtag "#Ad" at the bottom of the post — not a lengthier disclosure mentioning how much she was paid.
While celebrities and influencers have long used disclosures like "#Ad" to tell audience that a post is sponsored or paid for, the disclosure requirements for promoting cryptocurrencies and tokens, which are considered securities by the SEC, are more strict.
"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 enforcement division. "Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information."
Kardashian was paid $250,000 to publish the post, according to the agency. She's agreed to pay $1.26 million to settle the charges, the SEC announced. She also agreed not to promote any crypto assets for three years.
As part of the settlement, Kardashian has not admitted to or denied the SEC's allegations.
"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," her lawyer told Insider in a statement. "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."