Kim Kardashian must pay the SEC $1.26 million for her role in the EthereumMax saga

By: Dickson Arinze

October 4, 2022 5:38 AM

Many well-known people have come and gone from the cryptocurrency sector. Others have been facing the wrath of regulators, while some remain staunch supporters of certain crypto networks. Last year, reality star Kim Kardashian got into deep water after endorsing a cryptocurrency.

Recent reports indicated that Kardashian was being investigated and ultimately decided to settle with the US Securities and Exchange Commission (SEC) for this very offense.

The SEC has announced in a press release that the reality star has been charged with "unlawfully touting" a "crypto security" on social media. Her situation worsened because she hid the earnings she made from promoting EthereumMax. Reportedly, she was paid $250,000 to promote EMAX tokens on her Instagram account. On her wall it read,

"What I mean is, "ARE YOU INTO CRYPTOCURRENCY??? I'm just passing along some information I received from friends about the Ethereum Max Token; this is in no way intended as financial advice."

Kim Kardashian also had no interest in dragging out the legal process. Consequently, she reportedly settled on a $1.26 million settlement. According to reports, the settlement includes a $1,000,000 fine, plus prejudgment interest and disgorgement of about $260,000.

In addition, she admitted complicity in the SEC's probe. In addition, Kardashian stated that for the next three years, she would not engage in any business related to crypto asset securities.

Gary Gensler, chairman of the Securities and Exchange Commission, warns famous people to be cautious

We filed charges against Kim Kardashian today at @SECGov for illegally promoting a cryptocurrency investment.

This case serves as a cautionary tale to investors that just because a famous person or influential person backs a particular investment opportunity, such as a security backed by cryptocurrency, doesn't mean that it's good for everyone.

SEC Chair Gary Gensler, addressing the most recent case involving Kim Kardashian, discusses the importance of celebrities disclosing information about their compensation when advocating for investments in securities. And he went on to say

"This case serves as a cautionary tale to the investing public that just because a famous person or influential person backs a particular investment opportunity, such as a crypto-asset security, that doesn't mean it's a good fit for your portfolio. We advise investors to evaluate the risks and rewards of an investment in light of their individual financial objectives."

EthereumMax investors had previously filed lawsuits against NBA star Paul Pierce, boxer Floyd Mayweather Jr., and reality TV star Kim Kardashian.