Kim Kardashian is entering a new stage in her career.
She’s still working toward becoming a lawyer, of course, and in the meantime, she’s co-founded a private equity firm called Skky Capital with the help of a former partner from the Carlyle Group.
But before Kim can complete her transition from reality and social media star to full-blown mega-mogul, she’ll need to atone for some sketchy business practices she engaged in surprisingly recently.
And while the financial penalty might be chump change to Kim, the damage to her reputation may well prove permanent.
On Monday, the Securities and Exchange Commission announced charges against the SKIMS mogul for “touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion.”
A press release from the SEC revealed that Kim had agreed to a $1.26 million settlement “without admitting or denying the SEC’s findings.”
“Ms. Kardashian is pleased to have resolved this matter with the SEC,” Kim’s lawyer tells E! News.
“Kardashian fully cooperated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter. She wanted to get this matter behind her to avoid a protracted dispute,” the attorney continued.
“The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits.”
“This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn’t mean that those investment products are right for all investors,” SEC Chair Gary Gensler said in Monday’s press release.
“We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals,” Gensler continued.
“Ms. Kardashian’s case also serves as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities,” said Gurbir S. Grewal, the director of the SEC’s Division of Enforcement.
“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,” he continued.
“Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”
The settlement amount was not decided arbitrarily:
The $260,000 represents the amount that Kim received in order to endorse Ethereum, while the $1 million is apparently the government’s new standard penalty in cases such as these.
That amount was only recently decided upon, as celebrities hawking crypto on social media is a relatively new phenomenon.
Aside from the statement from her lawyer, Kim has not addressed this matter publicly, and it seems unlikely that she ever will.
Obviously, $1.26 million is nothing to Kim, so she really didn’t assume any risk when she agreed to promote Ethereum on her page.
The same can’t be said for followers of hers who might have invested, and then lost everything in the recent crypto crash.
Just something to bear in mind next time you see a commercial with some celeb (we’re looking at you, Matt Damon!) encouraging you to invest your life savings in the currency of the month.