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
  • 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:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

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

Unlocked by Template.png

Research

The march toward an interoperable and onchain-by-default internet depends on reliable messaging and value transfer across heterogeneous domains. Crosschain protocols now process >$1.3T in combined annual transfer volume and secure tens of millions of user interactions, yet no single design dominates.

article-image

The goal, per Santiago Santos, is to make crypto a relatable piece of tech for people who may not even understand it

article-image

Stripe stablecoin unit aims to operate under a federal charter enabling regulated stablecoin issuance and custody services

by Blockworks /
article-image

Will TradFi make crypto better or create more problems than it solves?

article-image

Subtle decisions by risk curators saved Aave from significant turmoil

article-image

The new Rootstock Institutional unit aims to connect professional investors to Bitcoin-native yield and liquidity strategies anchored in BTC’s security layer

by Blockworks /
article-image

DOJ files record civil forfeiture against more than 127,000 BTC linked to scam activity

by Blockworks /