The Securities and Exchange Commission has charged Kim Kardashian for promoting a crypto asset security from EthereumMax on her social media account without revealing she was paid to do so. The SEC’s order finds that Ms Kardashian failed to disclose that she received $250,000 to publish a post about the EMAX tokens on her Instagram account, a post that was linked to the EthereumMax website and provided instructions on how to purchase the tokens.

“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.”

“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,” Chair Gensler added.

By promoting the crypto without disclosing the payment, Kim Kardashian was found by the SEC to have violated the anti-touting provision of the federal securities laws.

“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.”

Gary Gensler, SEC Chair

Without admitting or denying the findings, Ms Kardashian has agreed to settle the charges and to pay $1.26m in penalties, disgorgement, and interest. The total fine includes approximately $260,000 in disgorgement, which represents Kardashian’s promotional payment, plus prejudgment interest, and a $1m penalty. Kim Kardashian has also agreed to not promote any crypto asset securities for three years, and she will cooperate with the Commission’s ongoing investigation.

“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,” said Gurbir S Grewal, Director of the SEC’s Division of Enforcement. “Investors are entitled to know whether the publicity of a security is unbiased, and Ms Kardashian failed to disclose this information.”

Kim Kardashian is the second influencer to be charged by the SEC within two weeks. On September 19, the crypto influencer Ian Balina was charged for performing an unregistered crypto sale and for promoting tokens without revealing his own compensation.

Since then, the SEC Chair Gary Gensler has published a video, warning buyers and investors not to make investment decisions based solely on influencer or celebrity recommendations.