NBA Legend and Hall of Famer Paul Pierce or also known as "The Truth," paid $1.4 million to the United States Securities and Exchange Commission as a settlement for a cryptocurrency he promoted on Twitter.
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BOSTON, MASSACHUSETTS - OCTOBER 22: Former member of the Boston Celtics Paul Pierce is introduced before the Celtics home opener at TD Garden on October 22, 2021 in Boston, Massachusetts. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement.
Settling $1.4 Million
According to Engadget's report, the Securities and Exchange Commission charged Paul Peirce for making false and misleading statements regarding cryptocurrency EthereumMax or EMAX as it failed to disclose the $224,000 payment in tokens he received for promoting it on social media.
SEC stated that Pierce additionally posed a misleading screenshot of an account showing much more EMAX holdings and profits than his account had. In a now-deleted tweet last 2021, he stated, "@espn I don't need you. I got @ethereum_max. I made more money with this crypto in the past month than I did with y'all."
The NBA legend tweeted a link that will direct users to the currency's website, which consists of instructions on purchasing EMAX tokens. SEC's Division of Enforcement Gurbir Grewal stated that investors are entitled to know whether a promotor of security is unbiased. But in Pierce's case, he failed to disclose this information.
Pierce has violated the anti-touting and anti-fraud provisions of federal securities laws, hence the charges from the SEC. Although he did not admit or deny the agency's findings, he agreed to settle a $1.1 million penalty and disgorge approximately $240,000.
Aside from this, CNBC reported that Pierce is now barred from promoting any cryptocurrency asset securities for the next three years as part of the settlement. SEC Chairman Gary Gensler stated that this case is yet another reminder to famous personalities and 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," the chairman stated.
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Celebrities Receiving Crypto Charges
Pierce joined other celebrities who received a federal class action lawsuit regarding cryptocurrency. Last October 2022, Kim Kardashian settled 41.26 million for plugging the same currency through Instagram Stories.
According to the agency, Kardashian received $250,000 to post about EtheremMax's EMAX tokens but did not disclose that she was paid. Similarly to Peirce, she was charged with violating the anti-touting provision of federal securities laws.
Gensler added, "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.
Last December, a federal judge dismissed the crypto scam lawsuit for EthereumMax against Paul Pierce, Kim Kardashian, and Floyd Mayweather Jr. as the allegations did not meet the standards that fraud cases usually demand.
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