The United States Securities and Exchange Commission has announced a $1.4 million settlement with former NBA player Paul Pierce for allegedly promoting a token project on social media.
In a Feb. 17 announcement, the SEC said Pierce promoted EthereumMax (EMAX) tokens through social media without disclosing that he had received a promotional payment and made “false and misleading statements” about the project. According to the organization, the promoters paid the former NBA star USD 244,000 in EMAX, in addition to posting messages on Twitter allegedly showing misleading information about earnings.
The financial regulator has previously sued celebrities promoting EthereumMax tokens. The SEC announced a $1.2 million settlement in October 2022 with Kim Kardashian for charges similar to those Pierce was facing; in that case, the celebrity failed to disclose a $250,000 payment for posting a story on her Instagram account promoting EMAX tokens.
“This case is yet another reminder to celebrities: The law requires disclosure to the public from whom and how much is being received to promote investment in securities, and investors cannot be lied to when promoting a security,” said the president. of the SEC, Gary Gensler. “When celebrities promote investment opportunities, including crypto asset stocks, investors should be careful to research whether the investments are right for them, and should be aware of why celebrities are making such promotions.”
Today we announced charges against former NBA player Paul Pierce for touting EMAX tokens on social media without disclosing the payment he received for the promotion and for making false and misleading promotional statements about the same crypto asset.
— US Securities and Exchange Commission (@SECGov) February 17, 2023
As part of the settlement, Pierce paid a $1.115 million SEC fine and approximately $240,000 in damages and agreed not to promote any cryptocurrency projects considered securities for three years.Gurbir Grewal, director of the SEC’s control unit, added:
“Investors have a right to know if a security promoter is impartial, and Mr. Pierce did not disclose this information.”
The SEC’s move was the latest in what many critics have called a “regulation by compliance” approach to crypto projects the agency considers securities. On February 9, the financial regulator announced that it had reached a settlement with Kraken, in which the exchange agreed to stop offering staking services or programs to US clients.
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