US SEC charges former NBA player for promoting crypto asset
- The SEC has charged Paul Pierce for promoting EMAX tokens
- The former NBA player has agreed to pay a penalty and is prohibited from promoting crypto asset securities for three years
The United States Securities and Exchanges Commission continues to take action against celebrities promoting crypto-projects. In its latest move, the SEC has laid charges against former NBA player – Paul Pierce. The NBA Hall of Famer was pulled up for his role in promoting EMAX tokens, sold by EthereumMax. The commission has also labeled the token as a security.
The commission claims that the former player promoted EMAX tokens on social media without disclosing the money earned for the promotion. In addition, the SEC also alleges that the player made false and misleading statements while promoting the token. The press release on the same read,
“The SEC’s order finds that Pierce failed to disclose that he was paid more than $244,000 worth of EMAX tokens to promote the tokens on Twitter. The SEC’s order also finds that Pierce tweeted misleading statements related to EMAX (…) without disclosing that his own personal holdings were in fact much lower than those in the screenshot.”
Celebrities held accountable for crypto promotions
The chairman of the SEC – Gary Gensler – stated that celebrities are required to disclose the amount of money they are making for promoting securities, including the details of who is making the payments. Former NBA player Pierce, however, failed to abide by this law, thereby drawing in the charges. Director of the SEC’s Division of Enforcement – Gurbir S. Grewal – said,
“The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion. Investors are entitled to know whether a promotor of a security is unbiased, and Mr. Pierce failed to disclose this information”
As a result, the former player has agreed to pay a penalty of just over $1 million. In addition, Pierce will also pay $240,000 in disgorgement and prejudgment interest. The NBA Hall of Famer is also prohibited from promoting any crypto asset securities for a period of three years.
Other notable celebrities involved in EMAX promotion
Notably, Pierce is not the only celebrity to promote EMAX tokens. Other celebrity names included reality TV star – Kim Kardashian, and boxer Floyd Mayweather Jr. The SEC had previously taken an action against Kim Kardashian for her role in EMAX promotion. The reality TV star had agreed to pay a fine of $1.26 million and not participate in crypto asset security promotion for three years.
The three celebrities also hit the headlines in January 2022 for the promotion of the crypto token. Investors sued them alleging participation in a pump-and-dump scheme, resulting in investors losing their money. This lawsuit, however, was dismissed by a federal judge