Full disclosure issues became central to reality TV star Kim Kardashian’s woes this week in a matter involving cryptocurrency, Instagram, and the US Securities and Exchange Commission (SEC).
Kardashian, also known as Kim K, published a promotional Instagram post in June 2021 that has now landed her in hot water.
The Post
Though she included a #hashtag in the post noting its promotional nature, it wasn’t enough to satisfy the SEC. The SEC requires public figures to disclose details about their businesses. That includes notifying the public if they are paid to promote a post, who’s paying them, how much they’re being paid, and the nature of the payment.
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On The Money
According to the SEC, Kardashian was paid $250,000 (R4.4 million) to post about EMAX tokens on her Instagram account to her 331 million followers. An EMAX token is a crypto asset offered by EthereumMax.
She broke SEC rules by touting the crypto token and neglecting to disclose that the post was promotional content for which she received payment.
“Today we announced charges against Kim Kardashian for promoting a crypto security offered by EthereumMax without disclosing the payment she received for the promotion,” notes the SEC in a tweet on Monday this week.
Today we announced charges against Kim Kardashian for promoting a crypto security offered by EthereumMax without disclosing the payment she received for the promotion.
Kardashian agreed to settle the charges, pay $1.26 million, and cooperate with the investigation.
— U.S. Securities and Exchange Commission (@SECGov) October 3, 2022
The SEC this week also reminded followers on Twitter about their warning, from April 2021, on the risks of investing in RegA security offerings.
A reminder that the SEC has warned investors about the risks of investing in Reg A securities offerings. 2/2https://t.co/SP2jbVKMzb
— U.S. Securities and Exchange Commission (@SECGov) September 30, 2022
The Settlement
- To settle the matter, the SEC issued a $1.26 million (R22.3 million) fine for failing to disclose the promotional post. She will pay a $1 million (R17.7 million) penalty and around $260,000 (R4.6 million) in disgorgement.
- Kardashian has also agreed to stop promoting cryptocurrency assets for three years.
- She has will forfeit the payment received from EthereumMax
The SEC says Kardashian has agreed to settle the charges and cooperate with the investigation.
She’s not the only celebrity accused of plugging crypto assets without following the rules. Former NBA star Paul Pierce and boxer Floyd Mayweather have also been accused of similar behaviour.
A drop in the ocean
Kardashian is said to have a net worth of an estimated $1.8 billion. To pay the fine, the star seems to have a few options at her disposal. Those range from promotional material from other brands to her lifestyle products (including a skincare range and clothing range) as well as her high fashion personal collection.
Kim Kardashian — a true-crime detective
Meanwhile, Spotify announced the premiere of another “original” podcast, Kim Kardashian’s The System: The Case of Kevin Keith. Two guesses for the narrator.
That’s another way to settle that SEC fine.
Imagine this, listening to eight episodes of Kim Kardashian narrating a true-crime story about Kevin Keith – a man convicted of triple homicide for nearly three decades.
I heard about this case 3 years ago and have been questioning it ever since. Join me to learn more about Kevin Keith’s story on my new podcast, The System🎙Listen now, only on @Spotify. New episodes every Monday. https://t.co/1TYi1yQFnp pic.twitter.com/apmmIT36zS
— Kim Kardashian (@KimKardashian) October 3, 2022