Former NBA player Paul Pierce has been fined by the Securities and Exchange Commission (SEC) for promoting the cryptocurrency EthereumMax (eMax) on social media. The SEC charged Pierce with violating securities laws by not disclosing that he was paid for the promotion.
Pierce was fined $75,000 and is prohibited from promoting securities for at least two years. The SEC also charged eMax’s founders with violating securities laws, and the company was ordered to pay $450,000 in penalties.
EthereumMax is a relatively new cryptocurrency that was launched in May 2021. According to its website, it is a decentralized platform that aims to provide a more efficient and secure way to conduct financial transactions. Pierce, who is an avid cryptocurrency investor, promoted eMax on his social media accounts in June and July of 2021.
The SEC alleges that Pierce did not disclose that he was paid for the promotion, and that his promotion of eMax contributed to a surge in the cryptocurrency’s price. In a statement, the SEC said, “Celebrities who endorse investment products must disclose the nature, scope, and amount of compensation they receive in exchange for the promotion.”
Pierce is not the first celebrity to be fined by the SEC for promoting cryptocurrencies without proper disclosure. In 2018, boxer Floyd Mayweather and music producer DJ Khaled were fined for promoting the ICO (initial coin offering) of a different cryptocurrency without disclosing that they were paid for the promotion.
The SEC has been cracking down on cryptocurrency-related violations in recent years. In addition to targeting celebrity endorsements, the agency has also been going after initial coin offerings, which it considers to be securities offerings subject to federal securities laws.
