Kim Kardashian Gets Slap on the Wrist From SEC

The SEC has charged Kim Kardashian for “unlawfully touting” obscure EthereumMax token

article-image

Kim Kardashian | Source: Shutterstock

share

key takeaways

  • Kardashian was paid $250,000 to publish a post on her Instagram account about EMAX tokens, the SEC says
  • The celebrity has agreed to a settlement for $1.26 million and to cooperate with the SEC’s investigation

Celebrity influencer Kim Kardashian has agreed to a $1.26 million settlement with the SEC over her June 2021 endorsement of EthereumMax (EMAX).

Kardashian hawked the previously unknown SafeMoon copycat to her 225 million followers on Instagram without disclosing that she was being paid $250,000 for the promotion.

“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 statement.

Loading Tweet..

Financial services firm Morning Consult found that some 54 million US adults were aware of Kardashian’s post. Of those, roughly 10 million said they invested in EthereumMax, the consultancy reported in September 2021.

Within two weeks, the token’s price crashed 96%, prompting allegations that it was no more than a “pump and dump scheme.”

“Scam projects usually like more influencers with less sophisticated audience as followers are more likely to go and buy the token with zero research and questions,” Serhii Zhdanov, CEO of cryptocurrency exchange EXMO, told Blockworks by email.

“If token allocates the same budget to the top influencers in finance/markets/economics category, it gets much worse results as the followers there are much more experienced,” he said.

A class action lawsuit followed alongside an SEC investigation, which is “ongoing,” and Kardashian is cooperating with the regulator, according to the statement.

Among the terms of the settlement agreement, Kardashian will be prohibited from promoting any “crypto asset security,” for a period of three years.

She is ordered to disgorge the $250,000 proceeds of her actions, plus interest, and pay a $1 million civil penalty to the SEC, which may, at its discretion, distribute the funds to investors or transfer them to the US Treasury.

Gabriel Shapiro, general counsel at Delphi Digital Labs, said on Twitter that the settlement represented a “stiff fine [and] an unusual direct rebuke from [SEC Chair] Gensler.” He noted that the original social media post by Kardashian was labelled as an advertisement, but she still ran afoul of securities laws because her compensation was undisclosed at the time.

The 41-year-old celebrity is estimated to have a net worth of $1.4 billion, so the civil penalty is the equivalent of a $90 fine incurred by a median average US family.

This story was updated on Oct. 4, 2022, at 10:15 am ET.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

tg trading bot report graphic.png

Research

Telegram trading bots have found their primary niche in highly speculative token launches and retail-dominated memecoin markets, with many features specifically tailored to token sniping and copy-trading strategies.

article-image

Ethereum is hoping that increased DA will grow user demand — and its profits through DA fees

article-image

11 years ago, Bitcoin contributors prevented a supply crisis… two centuries from now

article-image

Both samczsun and ZachXBT have issued warnings after the Bybit hack last month

article-image

The investor criticized Michael Saylor’s plan to render his personal bitcoin holdings inaccessible to anyone else forever

article-image

The exchange has structural defenses and protocols to limit manipulations

article-image

Upshift is being spun out of August, which raised $10 million earlier this month