Why was Kim Kardashian fined millions by the SEC?

Kim Kardashian will have to pay $1.26 million to settle Securities and Exchange Commission charges that she promoted a cryptocurrency on Instagram without disclosing that 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.

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.

Today @SECGov, we charged Kim Kardashian for unlawfully touting a crypto security.

This case is a reminder that, when celebrities / influencers endorse investment opps, including crypto asset securities, it doesn’t mean those investment products are right for all investors.

— Gary Gensler (@GaryGensler) October 3, 2022

Kardashian’s Instagram post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.

“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.

Will not promote any cryptoasset 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 an email.

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, shapewear, loungewear, and other products, and a skincare line called SKKN.