Kim Kardashian Charged by SEC for “Unlawfully Touting Crypto Security,” Agrees to $1.26M Settlement

 

SEC charges Kim Kardashian for unlawfully touting crypto on her Instagram account

 

The SEC on Tuesday slapped a $40,000 fine on the star and her husband, Kanye West, over their promotions of an initial coin offering by the cryptocurrency company, Centra Tech.

 

The SEC had charged the pair of promoting the coin offering in violation of federal securities laws on their social media accounts.

 

“Social media influencers like Kardashian have significant influence over consumers, and that influence often leads them to engage in risky business practices,” Stephanie Avakian, co-director of the SEC’s Enforcement Division, said in a statement.

 

The SEC said Kardashian’s Instagram and Twitter accounts received more than 250,000 likes and retweets — a significant amount of attention — from the promotion of the ICO.

 

The SEC’s action is the latest twist in the long and winding road of Kardashian and West’s investment in the ICO.

 

The regulator in October charged Centra Tech with fraud, saying its technology was essentially a new type of “drop” that allows a user to manipulate an existing virtual currency, known as Ether, in exchange for another virtual currency, known as MagnisesCoin.

 

Related: This social media star made millions promoting an ICO

 

A message on the ICO website from September claims: “Everyone has the opportunity to be a CEO! All you need is $10,000 to become a Centra Developer!”

 

According to the SEC, Centra’s security tokens do not exist and were not intended to be used as part of an investment strategy, despite the ICO pitch.

 

In its complaint, the SEC said that shortly after Kardashian and West tweeted about the ICO, they began posting about other unrelated topics.

 

The SEC also noted West is “openly part of a long-running public concert tour promoting his new album, ‘Ye,’ which has sold some 450,000 albums since its release last week.”

 

The social media spats add to long-running rumors about Kardashian and West’s marriage. They’ve been married for almost four years and share three children.

 

In a rare show of separation, West cut his tour short in November, flying back to Los Angeles so he and Kardashian could be near their family members.

Kardashian, in an interview with Ryan Seacrest on November 30, called their marriage “really great.”

 

West’s new album dropped in December, and fans seem less than happy about its themes, including social isolation, bipolar disorder, and drug use.

 

Related: Kylie Jenner is the richest person in the Kardashian-Jenner family

 

After it was leaked in November that Kardashian was paid millions for a shout out in one of the tracks, West tweeted that the whole album was for free.

 

The SEC’s action against the celebrity couple follows another recent crackdown on ICO promotions.

 

Last week, the SEC warned 43 people, companies and groups about promoting an ICO or token.

 

The agency said the promotion of such investments was akin to unregistered securities offerings, and individuals could face fines and jail time.

 

Related: Popular bitcoin ETF may be on hold again

 

The coin offering Kardashian and West promoted was by Snowflake Blockchain Technologies.