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.
- These documents are seen as central in Ripple’s battle against the SEC, which in 2020 accused the company of selling its XRP token without registering it as a security.
- The documents in question are internal emails, text messages, and expert reports that followed Hinman’s 2018 speech, in which he said ETH and BTC were not securities.
Shutterstock
- The U.S. SEC claimed in its response that it was under no obligation to issue new regulations for crypto, and that rules for crypto were already published and were sufficient.
- The agency also tried to distance itself from any public comments made by its chair Gary Gensler, particularly regarding his statement that most cryptocurrencies are securities.
- The cryptocurrency exchange is estimated to have more than 100,000 creditors, and between $500 million and $1 billion in both assets and liabilities.
- The Chapter 11 filing came less than a month after the U.S. SEC filed charges against Bittrex and its former CEO, claiming they were operating an unregistered securities exchange.