Paul Pierce, a former NBA player, has reached a $1.4 million settlement with the US Securities and Exchange Commission over allegations that he used social media to advertise crypto assets. As SEC stated on February 17, Pierce promoted EthereumMax (EMAX) tokens on social media without disclosing that he had received funds for the promotion and made “false and misleading statements” about the EthereumMax. The SEC claims that in addition to paying the former NBA star $244,000 in EMAX, promoters also paid him to post messages on Twitter purporting to show false information about profits.
crypto asset promoter receives a fine
Celebrities promoting EthereumMax tokens have previously been the focus of the financial regulator. In October 2022, Kim Kardashian and the SEC announced a $1.2-million settlement for allegations that Pierce was facing at the time; in that case, the court accused her of failing to disclose a $250,000 payment to post an Instagram story promoting EMAX tokens. “This case is yet another reminder to celebrities: The law requires you to disclose to the public from whom and how much you are getting paid to promote investment in securities, and you can’t lie to investors when you tout a security,” said SEC Chair Gary Gensler. “When celebrities endorse investment opportunities, including crypto assets, investors should be careful to research if the investments are right for them, and they should know why celebrities are making those endorsements.”
As part of the settlement, Pierce paid a $1.115-million penalty to the SEC and roughly $240,000 in disgorgement and agreed not to promote any crypto assets considered to be securities for three years. The SEC’s action was the most recent in what many market analysts have referred to as a “regulation by enforcement” strategy toward cryptocurrency projects that the agency considered securities.
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