The U.S. Securities and Exchange Commission on Friday said it charged former NBA star Paul Pierce with promoting EMAX crypto tokens, sold by EthereumMAX, on social media, without disclosing that he was receiving payment for the promotion and for making possible misleading statements about the asset.
The agency said that Pierce, without admitting or denying the SEC’s findings, agreed to pay a $1.115 million penalty and approximately $240,000 in disgorgement and prejudgment interest. Pierce also agreed to not promote any crypto asset securities for three years, the SEC said.
Pierce’s agent didn’t immediately respond to a request for comment. Pierce was a 10-time All-Star, an NBA champion, and member of the Naismith Memorial Basketball Hall of Fame; he last played in 2017.
The agency said Pierce didn’t disclose that he was paid more than $244,000 worth of EMAX tokens on Twitter, which included a tweet of a screenshot showing large holdings and profits of the asset. The SEC statement alleged that Pierce did not disclose that his own personal holdings were much lower than the ones shown in the screenshot.
“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,” said SEC Chair Gary Gensler, in a statement.
“When celebrities endorse investment opportunities, including crypto asset securities, investors should be careful to research if the investments are right for them, and they should know why celebrities are making those endorsements,” Gensler said.
EthereumMAX is the same crypto company that Kim Kardashian had promoted on her Instagram page. In October 2022, Kardashian agreed to pay $1.26 million to settle claims by the SEC for her failure to disclose that the EthereumMAX post on her Instagram story was a paid $250,000 ad.
In December, a federal judge dismissed the lawsuit against the founders of EthereumMAX and the celebrities who promoted it on social media, including Kardashian and Floyd Mayweather.
The charge against Pierce is the latest in a series of crackdowns by the SEC against the crypto industry.
On Thursday, the SEC charged Terraform Labs and CEO Do Kwon with defrauding crypto investors. The SEC has cracked down on crypto exchanges, including Kraken, a popular crypto exchange, which was hit with a $30 million fine for failing to register its crypto staking program earlier this month.