The Securities and Exchange Commission (SEC) charged Kim Kardashian with unlawfully promoting a cryptocurrency token through social media today (October 3) , and levied a penalty of $1.26 million against the reality TV star.
The token in question is EMAX, which is offered by EthereumMax. The coin’s white paper describes it as “a unique token that provides lifestyle perks with financial rewards and incentives to its holders with a pathway for practical long-term use in everyday life.”
According to the SEC order, Kardashian in June 2021 plugged EMAX on her Instagram account, which had 225 million followers. It purported to give inside information about the EMAX token:
The post included a link to the EthereumMax Web site, which provided instructions for how to purchase EMAX. The SEC maintains that Kardashian was paid approximately $250,000 for this promotion, but did not disclose that payment to her followers, which is a violation of securities laws.
As crypto companies have invested heavily in promotion by social media influencers, the SEC has made it clear for years that it will enforce the anti-touting provisions of securities laws. In 2017, the agency issued a statement warning investors that celebrity investment endorsements may violate the law if payments are not disclosed. In 2018, the boxer Floyd Maywether and the music producer DJ Khaled were charged with unlawfully promoting initial coin offerings.
The agency said that Kardashian is cooperating with its ongoing investigation.
The price of EMAX has dropped about 2 percent in the last 24 hours.