Former Boston Celtics small forward Paul Pierce has been charged by the U.S. Securities and Exchange Commission (SEC) for making misleading comments about unregistered crypto securities and promoting EMAX tokens. The SEC has fined Pierce $1.409 million for his actions.
The SEC has been cracking down on a range of crypto-related activities recently, including staking services, earn programs, stablecoins, and blockchain ecosystems. Pierce’s case is the latest in a string of enforcement actions against celebrities and influencers who have been promoting cryptocurrencies without disclosing their financial interests.
According to the SEC’s complaint, Pierce failed to disclose that he was paid more than $244,000 worth of EMAX tokens to promote the tokens on Twitter. In one tweet, Pierce shared a screenshot of profits that were much lower than his personal holdings, and in another, he shared the Ethereummax project’s website, which led to a portal to purchase EMAX tokens.
Pierce is not the first celebrity to be charged by the SEC for promoting the Ethereummax project and associated tokens. In Oct. 2022, socialite Kim Kardashian settled with the SEC for $1.26 million in penalties after unlawfully promoting EMAX.
In response to Pierce’s charges, SEC Chair Gary Gensler issued a statement reminding celebrities of their obligations to disclose their financial interests when promoting investment opportunities, including crypto assets. Gensler insisted that investors should be careful to research investment opportunities and not make investments “solely on the recommendations of a celebrity or influencer.”
The SEC’s charges against Pierce note that he violated the anti-touting and anti-fraud provisions of federal securities laws. Pierce settled with the SEC on a non-admit or deny basis and promised not to promote any crypto assets for three years.
The case highlights the need for greater transparency and disclosure in the crypto industry, particularly when it comes to celebrity endorsements. Investors should be cautious when making investment decisions and should always conduct their own research to ensure that they fully understand the risks involved.
The SEC’s actions against celebrities and influencers promoting crypto assets should serve as a warning to others in the industry who may be considering similar activities. With regulators increasingly focused on the crypto industry, it is more important than ever for companies and individuals to ensure that they are fully compliant with securities laws and regulations.
