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SEC Sues Former NBA Star Paul Pierce Over EthereumMax Promos
The Hall of Famer will pay $1.4 million in penalties and disgorgement to settle charges that he did not disclose payments to promote the token.
By Nikhilesh De
Updated Feb 17, 2023, 5:39 p.m. Published Feb 17, 2023, 4:30 p.m.
The U.S. Securities and Exchange Commission (SEC) sued former National Basketball Association player Paul Pierce for "touting" ethereumMax (EMAX) tokens without revealing he had been paid to do so.
In a release Friday, the SEC said Pierce had been paid $244,000 in EMAX tokens, but did not disclose the payments while marketing the project on Twitter. He also allegedly suggested he held a large amount of EMAX tokens through screenshots, despite his holdings being "much lower" than what he displayed. Pierce will pay $1.409 million in penalties and disgorgement.
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The NBA Hall of Famer agreed not to "promote any crypto asset securities for three years," the SEC's statement said.
The SEC previously settled with Kim Kardashian over similar charges. The reality TV star paid $1.26 million for not disclosing $250,000 in payment.
Read more: What Is EthereumMax? Inside the Crypto Kim Kardashian Lost $1.2M Promoting
In a statement, SEC Chair Gary Gensler said the settlement is "yet another reminder to celebrities" to disclose if they are being paid to promote investments.
"You can’t lie to investors when you tout a security,” he said. “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.”
The regulator's action comes a day after it sued Terraform Labs and founder Do Kwon on allegations of fraud and selling unregistered securities. The SEC alleged that basically the entire Terra ecosystem was implicated in securities law violations, including the yield-bearing Anchor protocol and the various tokens Terraform issued.
The SEC has been on a tear recently, settling charges with crypto exchange Kraken last week and indicating it would sue stablecoin issuer Paxos over its Binance USD token.
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Canadian Province Wins Forfeiture of $1M QuadrigaCX Co-Founder's Cash, Gold via Default Judgment
The ruling transfers cash, gold bars, watches, and jewelry seized from a CIBC safety deposit box and bank account into government hands after Patryn did not defend the case.
What to know:
- The Supreme Court of British Columbia has forfeited $1 million in cash and gold tied to QuadrigaCX's co-founder, Michael Patryn, to the government.
- Patryn did not contest the forfeiture, which involved 45 gold bars, luxury watches, and over $250,000 in cash seized under an Unexplained Wealth Order.
- The forfeiture may lead to a process determining if any assets can be directed to QuadrigaCX's creditors, who received 13 cents on the dollar in the bankruptcy settlement.
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