Paul Pierce, the former NBA star, fined $1.4m for openly supporting EMAX tokens

The US Securities and Exchange Commission recently targeted another celebrity for cryptocurrency endorsement, this time charging a former NBA star, Paul Pierce. According to reports, the regulator charged and then settled with Pierce due to his promotion of EthereumMax’s EMAX tokens. The regulator marked this token as an unregistered security, after which it brought charges after Pierce.

The SEC said that Pierce promoted the tokens after failing to disclose that he received over $244,000 in EMAX as payment for doing so. Pierce promoted the asset on Twitter, but the SEC alleges that his promotion of the digital currency contained misleading statements.

The tweet itself contained a screenshot of an account that had a large holding of the asset, showing that it delivered significant profits. However, it failed to disclose that Pierce’s own holdings are much lower than the amount displayed on the screenshot.

Interestingly, Pierce is also not the only celebrity to get targeted for EMAX token endorsement. Before him, in October, the regulator also charged Kim Kardashian, accusing her for promoting unregistered securities. At the time, the SEC reached a settlement, issuing a monetary penalty of $1.26 million that Kardashian agreed to pay.

Other celebrities, such as rapper DJ Khalid and famous boxer Floyd Mayweather were also charged by the regulator for allegedly fraudulent ICO promotions.

The SEC continues its crackdown on crypto-connected companies and celebrities

Without many options left to him, Pierce also reached the settlement with the SEC, agreeing to pay $1.4 million for alleged violations of anti-touting and antifraud provisions. This is the total that Pierce has to pay, where $1.12 million were penalties, while the remaining $240,000 were in disgorgement and prejudgment interest. In addition, Pierce agreed not to promote any other digital asset securities in the following three years. However, while he did agree to pay the penalties, he did not admit or deny any wrongdoings.

Gary Gensler, the Chair of SEC, said that the case serves as another reminder for celebrities that the law wants them to disclose details about promotions of assets, including who paid them to promote them and how much.

The SEC has been very strict when it comes to the endorsement of crypto securities. The adoption of retail crypto assets went up after numerous celebrities promoted them, and most of such projects were labeled as unregistered securities by the SEC. However, the regulator is still locked in years-long legal battle with Ripple, still attempting unsuccessfully to prove that the XRP token is an unregistered security.

The regulator also brought charges against the collapsed company Terraform Labs and its CEO, Do Kwon, calling the business a “multi-billion dollar crypto asset securities fraud.”