The US Securities and Exchange Commission said on Friday that it accused former NBA star Paul Pierce of promoting EMAX crypto tokens, sold by EthereumMAX, on social media without disclosing that he received payment for the promotion and for making possible misleading statements about the asset.
The agency said Pierce, without admitting or denying the SEC’s findings, agreed to pay a $1.115 million fine and approximately $240,000 in disgorgement and prejudgment interest. Pierce also agreed not to market any crypto…
The US Securities and Exchange Commission said on Friday that it accused former NBA star Paul Pierce of promoting EMAX crypto tokens, sold by EthereumMAX, on social media without disclosing that he received payment for the promotion and for making possible misleading statements about the asset.
The agency said Pierce, without admitting or denying the SEC’s findings, agreed to pay a $1.115 million fine and approximately $240,000 in disgorgement and prejudgment interest. Pierce also agreed not to market any securities in cryptoassets for three years, the SEC said.
Pierce’s agent did not immediately respond to a request for comment. Pierce was a 10-time All-Star, an NBA champion and a member of the Naismith Memorial Basketball Hall of Fame; he last played in 2017.
The agency said Pierce did not disclose that he was paid for more than $244,000 in EMAX tokens on Twitter, which included a tweet of a screenshot showing large holdings and profits from the asset. The SEC statement alleged that Pierce failed to disclose that his own personal holdings were much lower than those shown on the screen.
“This case is another reminder to celebrities: The law requires you to disclose to the public from whom and how much you are paid to promote investment in securities, and you cannot lie to investors when you refer to a security,” the SEC said- manager Gary Gensler, in a statement.
“When celebrities endorse investment opportunities, including securities in cryptoassets, investors should be careful to research whether the investments are right for them and they should know why celebrities are making these recommendations,” Gensler said.
EthereumMAX is the same crypto company that Kim Kardashian had promoted on her Instagram page. In October 2022, Kardashian agreed to pay $1.26 million to settle claims by the SEC for her failure to disclose that the EthereumMAX post on her Instagram story was a $250,000 paid advertisement.
In December, a federal judge dismissed the lawsuit against the founders of EthereumMAX and the celebrities who promoted it on social media, including Kardashian and Floyd Mayweather.
The charge against Pierce is the latest in a series of actions by the SEC against the crypto industry.
On Thursday, the SEC accused Terraform Labs and CEO Do Kwon of defrauding crypto investors. The SEC has cracked down on crypto exchanges, including Kraken, a popular crypto exchange, which was hit with a $30 million fine for failing to register its crypto staking program earlier this month.
The SEC also hit two crypto exchanges, Gemini and Genesis Global Capital, in January with charges related to unregistered securities.
—Weston Blasi contributed reporting to this article.
