Reality TV star Kim Kardashian has been fined $1 million after she promoted cryptocurrencies through her Instagram account, without specifying that she advertised.
She also must give up the $250,000 she was paid for the Instagram post about Ethereum Max tokens, plus interest, according to a Securities and Exchange Commission (SEC) settlement announced Monday.
Kardashian is the latest celebrity to get ensnared in regulations that require full disclosure by people getting paid to promote financial products.
In 2020, actor Steven Seagal agreed to pay more than $300,000 as part of a similar settlement with the SEC, which also banned him from promoting investments for three years.
In 2018, the SEC settled charges against professional boxer Floyd Mayweather Jr. and music producer DJ Khaled for failing to disclose payments they received for promoting investments in a digital currency.
Many celebrities and athletes regularly promote crypto through advertisements on TV and online in ways that do not violate any law. Matt Damon, Tom Brady, Reese Witherspoon, and Gwyneth Paltrow are among those who have used their fame to spread enthusiasm for cryptocurrencies.
SEC Chair Gary Gensler said in a statement that the Kardashian settlement "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.”
Gensler also used Monday's attention-grabbing settlement with a celebrity as an opportunity to educate the public, releasing a humorous YouTube video that warns about the potential pitfalls of investment advice doled out by the rich and famous.
"Bravo to SEC Chairman Gensler, whose action shows that no celebrity, regardless of how big or famous, that profited from pushing these risky cryptocurrency investments should be able to simply walk away," said Adam Moskowitz, a class-action attorney currently suing Mark Cuban for promoting the company Voyager Digital before it failed.
The SEC said Kardashian agreed to cooperate with an ongoing investigation, though it didn't provide any details on that investigation.
A lawyer for Kardashian, Patrick Gibbs, said she "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."
While Kardashian is well known for her role in the TV series "The Kardashians,” she is also a successful businesswoman with clothing and skincare brands.
