The NBA legend promoted a cryptocurrency on his Twitter which was flagged by the Securities and Exchange Commission. The agency charged the former basketball player for making false and misleading statements, resulting in him settling for $1.4 million.
The Promotion of EthereumMax
Paul Pierce took to Twitter and promoted EtheruemMax, posting a screenshot of his account. However, it was found that the screenshot showed more EMAX holdings and profits than he actually had, which violates anti-touting and antifraud provisions of federal security laws.
Pierce also posted a link on Twitter that leads to the cryptocurrency's website, as well as instructions on how to purchase EMAX tokens. The agency flagged the fact that he did not disclose the $244,000 worth of tokens he was paid to promote the currency on Twitter.
Paul Pierce ended up agreeing to refrain from any kind of cryptocurrency promotion for three years on top of the settlement. However, he did not admit nor deny the SEC's findings as part of the settlement according to Engadget.
In the same case as Kim Kardashian, SEC Chair Gary Gensler expressed that the case is a reminder to celebrities that the law requires them to disclose how much they were getting paid to the public. This also goes for the company or people who are paying them.
He added that when celebrities endorse investment opportunities, which include crypto asset securities, customers and investors should take the time to research if the investments are right for them. They should also learn why the celebrities are promoting them in the first place.
Similar Case, Similar Cryptocurrency
Last year in October, Kim Kardashian was also charged by the Securities and Exchange Commission for touting on social media, particularly with the same cryptocurrency firm. She was said to be promoting crypto asset security offered and sold by EthereumMax on Instagram.
The social media personality published a post about EMAX tokens, and similar to Paul Pierce, it also had a link that led to EthereumMax's website, which instructs potential investors or customers on how to purchase EMAX tokens, according to an SEC filing.
Kardashian failed to disclose the amount she was paid as well for the promotion, which was later found to be $250,000. This led to the socialite paying a settlement of $1.26 million, as well as cooperating with the agency on their investigations.
Director of the SEC's Division of Enforcement Gurbir S. Grewal stated that the federal securities laws are clear. Celebrities or anyone who promotes a crypto asset should reveal the nature, source, and amount of compensation they received for doing a promotion.
Showing the similarities of the case with Kardashian and Pierce, the former did not admit nor deny the SEC's findings as well and agreed to pay the penalties. This is on top of the approximate $260,000 in disgorgement, and not promoting crypto for three years.
