SEC accuses former NBA star Paul Pierce of illegally promoting crypto

Federal securities regulators on Friday charged former NBA player Paul Pierce with violating anti-fraud and anti-touting rules. to promote a cryptocurrency on his social media account without disclosing that he was paid to do so.

Pierce earned more than $244,000 in EMAX to push the EthereumMax tokens on his Twitter account, investigators at the US Securities and Exchange Commission said. Pierce misled the public about the investment performance of the digital token when he tweeted a photo of an account with large profits even though his own personal portfolio was not doing as well, the SEC said.

Pierce agreed to settle the charges by paying $1.4 million in penalties, disgorgement and interest “without admitting or denying the SEC’s findings,” the commission said. Pierce also agreed not to show any crypto assets for three years.

A representative for Pierce did not immediately respond to a request for comment Friday.

Pierce is an NBA Hall of Famer from California who played 19 seasons, mostly with the Boston Celtics. It concerns a tweet he posted in May 2021 after being fired from ESPN.

“ESPN I don’t need you. I have EthereumMax,” Pierce tweeted. “I made more money with this crypto in the last month than I did with you guys in a year. The TRUTH shall set you free.”

Intense investigation by the FBI

The crypto industry has been under intense scrutiny from financial regulators in recent months, ever since investors began losing billions of dollars worth of assets in fraud or account hacks. The skin got even hotter last November when FTX Trading declared bankrupt after experiencing crypto’s version of a bank run. In the wake of FTX’s collapse, lawmakers in Washington have renewed their calls to regulate the industry.

To be clear, Pierce isn’t the first celebrity to promote crypto and end up paying a fine for it. Kim Kardashian in October agreed to pay $1.26 million in a similar settlement settlement with the SEC, linked to the same EMAX cryptocurrency. Like Pierce, she also agreed not to promote crypto for three years.

Other high-profile figures publicly endorsing various digital coins include Matt Damon, Paris Hilton, Jamie Foxx, Ashton Kutcher, Gwyneth Paltrow and Dennis Cole, better known as Ghostface Killah of the Wu-Tang Clan.

“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 investments in securities, and you cannot lie to investors when you present a security,” the SEC Chairman said 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.”

Pierce, Kardashian and boxer Floyd Mayweather were also named as co-defendants last year in a class action lawsuit against crypto investors. against EthereumMax.

In 2018, Mayweather and music producer DJ Khaled settled with the SEC over cryptocurrency promotions.