Kim Kardashian, who is said to be worth $1.8 billion, will pay $1.26 million in a settlement agreement with the Securities and Exchange Commission (SEC), after being charged with unlawfully promoting a cryptocurrency to her 350 million followers without disclosing she was paid for the recommendation.

The SEC published a statement that says Kardashian agreed to settle the SEC charges and “pay $1.26 million in penalties, disgorgement, and interest, and cooperate with the Commission’s ongoing investigation.”

Ms. Kardashian, who aspires to become an attorney, is paying the $1.26 million settlement but does not admit or deny the SEC’s findings. The global celebrity also agreed not to promote any cryptocurrency for the next three years.

Currently, Kardashian is studying for the bar, and passed the ‘baby bar’ last year, on her fourth attempt. Officially known as the First-Year Law Students’ Examination, the baby bar is a one-day test given to certain law students in California who are completing their first year of law study at a California State Bar unaccredited law school or through the Bar’s Law Office Study Program, as well as those who are attending an accredited law school but without two years of college work under their belt.

Though she did not admit or deny any wrongdoing in the SEC settlement agreement, this settlement may impact her future legal career. Everyone who wants to become an attorney in California undergoes a character and fitness evaluation. Part of the information reviewed for potential new attorneys includes any lawsuits and arrests. When Ms. Kardashian takes the bar exam, she will need to disclose this SEC settlement and any other instances where she was sued.

The California State Bar Association will review this new SEC finding and settlement when Kardashian officially seeks to become an attorney. On its website, the California State Bar Association notes, “When considering whether an applicant has the good moral character required for admission to practice law in California, the State Bar evaluates whether the applicant possesses the qualities of honesty, fairness, candor, trustworthiness, observance of fiduciary responsibility, respect for and obedience to the law, and respect for the rights of others and for the judicial process by reviewing past conduct, including: The severity of the issue, length of time since the incident, and the frequency with which an act occurred are all factors that will be taken into consideration. This is a holistic determination; there is no act of misconduct that, in and of itself, automatically disqualifies an individual from obtaining a positive moral character determination.”

With Ms. Kardashian’s swift resolution to the SEC finding, the state bar may take a dim view of the celebrity’s case but also may determine the handling of the settlement was above board. As the state bar states, “past misconduct, however, requires a showing of rehabilitation that is commensurate with the seriousness of the misconduct.”

Furthermore, this SEC case was not a criminal proceeding, so the charges against her were not criminal.

The SEC’s order noted that Kardashian failed to disclose to her 350 million followers and that, “she was paid $250,000 to publish a post on her Instagram account about EMAX tokens, the crypto asset security being offered by EthereumMax. Kardashian’s post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.”

SEC Chair Gary Gensler said the commission’s findings in this case are important for all celebrities and their followers to note, since the laws are clear that they must disclose publicly they are being paid for endorsing investments in securities.

"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," said Gensler. "We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals. 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.”

Kardashian’s $1.26 million fine includes approximately $260,000 in disgorgement, which represents her promotional payment, plus prejudgment interest, and a $1,000,000 penalty.

Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, said, “Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information."

Major big-name celebrities such as Kim Kardashian, Floyd Mayweather, Jr., NBA star Paul Pierce, and company EthereumMax, are also facing a lawsuit for an alleged pump and dump scam.

Court documents accuse the multiple celebrities and EthereumMax of making false or misleading statements about digital tokens to the public. The digital tokens in question are sold by EthereumMax. The company offers the ERC-20 digital tokens on its network, ETHUSD.

The lawsuit claims that plaintiff New York resident Ryan Huegerich and other investors who bought the digital EthereumMax tokens between May 14, 2021, and June 17, 2021, suffered losses as a result of the celebrities’ social media actions.

The alleged scheme involves digital tokens that are blockchain-based digital assets, called “ERC-20 tokens.” Once an ERC-20 digital token is made, it can be spent, traded, or involved in transactions by owners. These particular EMAX digital tokens were traded, for the most part, against “ether," which is the unique currency of the Ethereum blockchain, and mostly sold on a network called “Uniswap," a decentralized exchange for digital token listings.

On social media, Kardashian hyped EthereumMax in June 2021 to over more than 250 million followers on her Instagram account. In her post, Kardashian asked, “Are you guys into Crypto????” Her post then added, “This is not financial advice but sharing what my friends just told me about the Ethereum Max token. A few minutes ago, Ethereum Max burned 400 trillion tokens — literally 50% of their admin wallet giving back to the entire Max community.”

Kardashian’s attorney said she is happy with the SEC settlement.

“Ms. Kardashian is pleased to have resolved this matter with the SEC,” said Kardashian’s attorney Patrick Gibbs. “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 agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits.”