Kim Kardashian fined $1.2 million for deceptive Instagram post
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Kim Kardashian has been hit with a $1.26 million fine over an Instagram post that she failed to disclose was paid-for – officials have said the case is part of a widespread problem among celebrities.
According to the US Securities and Exchange Commission (SEC), Kardashian promoted EMAX cryptocurrency tokens on her Instagram Story but did not make it clear that she had been paid $250,000 by the cryptocurrency brand, EthereumMax. By doing so, she broke a part of the Securities Act that makes it unlawful for people to promote securities without fully disclosing any payment they had received to do so, the SEC said.
In her post, the reality TV star turned business mogul promoted the tokens, and included a link to a website that gave instructions on how to buy the tokens. Kardashian suggested in the post that she had been told about the token by "friends" and included the disclaimer that "this is not financial advice".
The post, which was published in June 2021, included a video from the mum-of-four in which she said she was making a "big announcement". Kardashian is now required to pay the fine – made up of the $260,000 she received for promoting the currency, plus a $1 million penalty – and will co-operate with the SEC in its ongoing investigation into cryptocurrencies that are backed by celebrities. The 41-year-old also agreed not to promote any crypto assets for three years.
"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 Chair Gary Gensler. "We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals."
He went on: "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."
In response, Kardashian's lawyer told the BBC: "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."
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