Ex-NBA star Paul Pierce settles with SEC over crypto breach

NBA Hall of Famer Paul Pierce, who won a championship with the Boston Celtics, agreed to settle with the Securities and Exchange Commission for $1.4 million over allegations that he illegally traded crypto securities, the regulator announced Friday.

The action against Pierce involves his public statements about EthereumMax, or EMAX, the same cryptocurrency product that the SEC accused Kim Kardashian of illegally promoting.

Pierce promoted EthereumMax tokens on Twitter while failing to disclose that he was paid for the promotion with over $244,000 worth of EMAX tokens, the SEC alleged. Pierce did not admit or deny wrongdoing as part of the settlement and will pay a $1.1 million penalty and forfeit “approximately $240,000,” the SEC said.

Pierce is also barred from marketing securities in cryptoassets for three years, the SEC said.

“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 present a security,” the SEC Chairman said Gary Gensler in a statement.

Pierce’s social media support for EthereumMax also allegedly involved misleading the public about his EMAX holdings, according to the SEC. Pierce allegedly shared misleading screenshots of his EMAX holdings and profits, the SEC said, without disclosing that his personal holdings were actually far lower.

“@espn I don’t need you,” Pierce wrote in a May 2021 tweet. “I got @ethereum_max I made more money with this crypto in the last month than I did with you guys in a year.”

The SEC said Pierce’s gross compensation from ESPN was over $1 million in 2020.

Representatives for Pierce did not immediately respond to a request for comment. Kardashian settled with the SEC in October for $1.2 million over her alleged honking of EMAX, which included the now-infamous line, “Are you guys into crypto?”

A federal class-action lawsuit naming Pierce, Kardashian, Floyd Mayweather Jr. and other EthereumMax boosters were rejected in December. A judge found that the plaintiffs’ allegations did not meet the “high pleading standards” that fraud cases require. The lawsuit was filed again the same month.

The SEC has become more aggressive with its enforcement actions in the crypto space. On Thursday, the regulator charged stablecoin issuer Terraform and CEO Do Kwon with fraud.

Earlier this week, the SEC proposed changes to federal custody regulation that could have a significant impact on the way crypto exchanges are able to store certain assets. Days earlier, the crypto exchange Kraken took up with the SEC about the betting service. And in January, the SEC unveiled charges against crypto lender Genesis and crypto exchange Gemini for alleged unregistered offers and sales of securities.

— CNBC’s Rebecca Picciotto contributed to this report.

SEE: SEC Chairman Gensler breaks down allegations against Kim Kardashian