Kim Kardashian Pays $1.26M to Settle SEC Charges Over EthereumMax Promotion
- The U.S. SEC has charged the American celebrity of violating the anti-touting provision of the federal securities laws with her promotion of EMAX in 2021.
- The Kardashian has agreed to settle, and will pay 260,000 in disgorgement and fees, $1 million in penalties, as well as not promote any crypto assets for the next three years.
Kim Kardashian at the World Congress on Information Technology (WCIT), Yerevan, Armenia, 8 October 2019. Wirestock Creators/Shutterstock
American celebrity Kim Kardashian has agreed to pay $1.26 million to the Securities and Exchange Commission (SEC) to settle charges related to the EthereumMax (EMAX) scheme, the regulator said in a press release on 3 October.
According to the announcement, the star of “Keeping Up With the Kardashians” was charged for promoting a “crypto asset security” connected to EthereumMax in 2021, without disclosing a payment she received for her involvement. The SEC noted that the Kardashian received $250,000 from the project to publish a post on her Instagram profile promoting the EMAX token, and with a link to the EthereumMax website. SEC Chairman Gary Gensler commented on Twitter:
While Kardashian did not admit or deny the SEC’s findings — which accused her of violating the anti-touting provision of the federal securities laws — she agreed to settle the charges and pay $260,000 in disgorgement and fees, and another $1 million in penalties. The reality TV star has also agreed to not promote any cryptocurrency assets for the next three years, and cooperate in any further investigations into EthereumMax.
Kim Kardashian, ex-boxer Floyd Mayweather, and a handful of other celebrities were sued in January by EthereumMax investors, who accused them of collaborating with the project to “misleadingly promote and sell” the EMAX crypto asset. The price of EthereumMax’s native token soared around the time it was receiving promotions from various celebrities, but crashed significantly shortly after.
- The EOS Network Foundation is calling on the EOS community to opt-out from the proposed settlement as it “does not adequately compensate” for the losses caused by Block.one.
- Not only are the $22 million a tiny fraction of the $4 billion raised during the EOS ICO, but the settlement will also bar community members for filing future complaints against the company.
Image of an EOS crypto token. Bybit / Flickr
- During an interview with FT, CEO Brian Armstrong said that before the lawsuit a SEC staff member had said that all crypto except BTC was security, and should be delisted.
- When asked how he came to that conclusion, the SEC staff member reportedly said “we’re not going to explain it to you, you need to delist every asset other that Bitcoin”.
- The bankrupt crypto lender has agreed on a settlement with its Series B holders on how to distribute the $25 million from the sale of self-custody platform GK8.
- The majority of funds, $24 million, will be allocated for legal expenses, while the remaining $1 million will be distributed between the Series B holders.