The U.S. Securities and Exchange Commission has charged former NBA player Paul Pierce with violating anti-fraud and anti-touting rules by promoting the EthereumMax cryptocurrency. Pierce has agreed to settle the charges and pay $1.409 million in penalties.
The SEC has charged the NFT star for touting EMAX tokens, cryptocurrencies sold by EthereumMax, on social media without disclosing the payment he received for the promotion and for making false and misleading statements regarding the token, according to a Friday press release.
The commission detailed that Pierce received more than $244,000 worth of EMAX tokens to promote the project on Twitter. On one special occasion, Pierce tweeted a screenshot of an account showing large holdings and profits without disclosing that it was not his own personal holdings.
The NBA star 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 tout any crypto assets for three years. SEC Chair Gary Gensler said:
“This case is yet another reminder to celebrities: The law requires you to disclose to the public from whom and how much you are getting paid to promote investment in securities, and you can’t lie to investors when you tout a security.”
Pierce is an NBA Hall of Famer from California who played 19 seasons, mostly with the Boston Celtics. He was fired from ESPN in April 2021 after he posted a video in which he was at a gathering with strippers.
EthereumMax, not to be confused with Ethereum, was a speculative digital token created in May 2021 by unknown developers. The project was promoted by a number of high-profile celebrities, including Kim Kardashian and Floyd Mayweather Jr.
In October last year, the SEC also charged Kardashian for touting the EMAX crypto asset on her Instagram feed. At the time, the reality TV superstar agreed to pay $1.26 million to settle the charges over the promotion of the token.
EthereumMax’s EMAX token has taken a nosedive since its launch in 2021. The token is currently down by more than 99% compared to its all-time high.
SEC Ramps Up Efforts to Rein in Crypto
The SEC has gotten more aggressive with its enforcement action in the crypto space. On Thursday, the commission charged stablecoin issuer Terraform and CEO Do Kwon for allegedly orchestrating a multibillion-dollar cryptocurrency fraud.
Last week, the commission reached an agreement with crypto exchange Kraken to stop offering staking services or programs to clients in the country and pay $30 million to settle allegations that failed “to register the offer and sale of their cryptoasset staking-as-a-service program,” which the commission qualified as securities.
Furthermore, the SEC has threatened Paxos, a US-registered firm that issues Binance’s stablecoin Binance USD (BUSD), with legal action due to its issuance of BUSD tokens. The agency argued that BUSD is considered an unregistered security.
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