SEC accuses Paul Pierce of touting EthereumMax cryptocurrency
The Securities and Exchange Commission has accused NBA Hall of Famer Paul Pierce of making false, misleading advertising statements about the crypto token, EthereumMax.
The SEC charges allege that Pierce failed to disclose a payment of more than $244,000 in EMAX.
“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.
The order also alleges that Pierce tweeted misleading statements related to EMAX, including tweeting a screenshot of an account showing large holdings and profits without disclosing that his own personal holdings were much lower.
In addition, one of Pierce’s tweets contained a link to the EthereumMax website, which provided instructions on how potential investors can purchase EMAX tokens.
The SEC’s order finds that Pierce violated the anti-touting and anti-fraud provisions of the federal securities laws. Without admitting or denying the SEC’s findings, Pierce has agreed to pay a $1.1 million fine and approx. Pierce also agreed not to market any crypto-asset securities for three years.
In October, Kim Kardashian agreed to pay $1.2 million to settle charges with the SEC for not disclosing the payment she received for the promotion of EthereumMax.
In 2021 during crypto’s bull run, many celebrities increased the hype around digital assets by endorsing various crypto tokens on their social media platforms – which can have a large reach.
Other notable celebrity crypto endorsers have included Matt Damon, Tom Brady, Mike Tyson, Reese Witherspoon, Mark Cuban, DJ Khaled, Floyd Mayweather, Justin Bieber and Madonna
A September 2022 Bankrate poll found that US investors’ comfort with cryptocurrencies has plunged since last year, particularly among millennial and Gen-Z investors who use social media as a primary source of investment.
Between 2021 and September 2022, comfort with cryptocurrencies fell 41% for millennials.
“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 added.
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