Kim Kardashian Agrees To Pay SEC $1.26 Million Over Alleged Promotion Of Crypto Scam

Well-known TV personality and billionaire Kim Kardashian has agreed to pay more than $1.26 million to the United States Securities and Exchange Commission (SEC) over her alleged promotion of the EthereumMax (EMAX) pump and dump scheme.

Kardashian has been charged for "touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion," the financial regulator said in a news release Monday.

The billionaire neither accepted nor denied the allegations but agreed to pay the required sum, which includes approximately $260,000 in disgorgement representing the compensation she received for promoting EMAX tokens, along with prejudgment interest and a $1,000,000 penalty.

"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," SEC Chair Gary Gensler said in the news release. "We encourage investors to consider an investment's potential risks and opportunities in light of their own financial goals."

The SEC said Kardashian was paid around $250,000 for the promotion of the EMAX tokens via an Instagram post that contained a link to the official website of EthereumMax and urged many fans to purchase the EMAX tokens.

"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," Gensler added.

Additionally, Kardashian also agreed not to promote any cryptocurrency or digital asset for three years, as she failed to disclose that she was paid to promote a token.

As per CoinMarketCap, EMAX is a token based on the ERC-20 standard on the Ethereum Network, and as of 8:33 p.m. ET, its price is $0.000000008761, almost doubling in the last 24 hours. The token is significantly low from all-time high of $0.00000051, which was noted at the time of Kardashian's promotional post on Instagram.