Kim Kardashian agrees to pay over $1 million in SEC charges for crypto promotion

The SEC has charged reality star Kim Kardashian for unlawful crypto promotion, slapping her with a heavy fine that she has agreed to pay.

Video Transcript

DAVE BRIGGS: Kim Kardashian agreeing to pay $1.26 million to settle charges over crypto promotion. The media star and businesswoman paying up after the SEC said she failed to disclose she was paid to promote a crypto token sold by Ethereum Max.

According to the settlement, Kardashian was paid a quarter of a million dollars by Ethereum Max for a single post through an intermediary. SEC chairman Gary Gensler saying, quote, "This case is a reminder that when celebrities or influencers endorse an investment opportunity, including crypto asset securities, it doesn't mean that those investment products are right for all investors."

Now, that Instagram post in question, she did hashtag it ad, Rachelle. This seems a bit odd to target Kim Kardashian with all the malfeasance spread across the sector. And I can't figure out exactly where they draw the line between that post and, say, all the celebrity ads we saw in the Super Bowl, most notably Matt Damon and others.

RACHELLE AKUFFO: And you raise a fair point because usually, when you see hashtag #ad, that does imply that you've been paid for it. I don't know if it was the particular amount she got paid. But I mean, you have to imagine Matt Damon and others obviously got paid a lot as well for these Super Bowl ads that were also touting these crypto products. And I thought it was interesting. She settled without admitting or denying the SEC's findings, so it's not like there was an admission of guilt in this. It seemed like she essentially just wanted this to go away.

And she did say in that post, this is not financial advice, but sharing what my friends just told me about Ethereum Max token. So there does seem to be a lot of gray area, but I think she just wanted to sort of settle it and just have it go away. But it's interesting because essentially, we're treating it like a security before regulators have really decided what they're going to classify certain crypto products as. So, a lot of gray area here for sure.

SEANA SMITH: Yeah, lots of news also with just Ethereum Max, the fact that they do seem to be regulating it like a security. When we talk, though, about why Kim Kardashian, not Matt Damon-- Matt Damon was trending all over Twitter after this news broke this morning because of that ad that you referenced that ran last fall for crypto.com. And the theory out there is because Kim Kardashian was endorsing a specific product, whereas Damon was endorsing a platform.

But still, though, there are so many gray areas, especially when it comes to investing in crypto and celebrities and influencers. Kim Kardashian far from the only person out there that has a massive social media following to promote cryptocurrencies and other crypto products. So it will be interesting to see if we do see the SEC go after more big players in that space. I don't know.

DAVE BRIGGS: Most social media influencers don't know SEC regulations. Now I know ignorance is not necessarily an excuse, but how many of them actually know-- now they do.

SEANA SMITH: Yeah, now they do.

DAVE BRIGGS: Now they do, but before--

SEANA SMITH: Now they know you can't just do hashtag #ad on it and get out of it. But yeah, will be interesting to see. But again, Kim Kardashian there getting charged just over a million.