Paul Pierce Settles Crypto Violations With SEC

In an announcement released on Friday, the Securities and Exchange Commission announced that NBA Hall of Famer Paul Pierce, who won a championship with the Boston Celtics, has agreed to settle for $1.4 million over allegations that he unlawfully promoted crypto securities, according to the regulator.

The SEC decided to take action against Pierce because of his public statements regarding EthereumMax, or EMAX, the same crypto security product that influencer Kim Kardashian was charged with unlawfully promoting when she was charged by the SEC.

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EMAX tokens worth over $244,000 were used to pay Pierce for his promotion of EthereumMax tokens on Twitter, according to the SEC. A $1.1 million penalty will be imposed on Pierce, along with approximately $240,000 in disgorgement, as part of the settlement, the SEC said.

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Additionally, Pierce will be prohibited from promoting any crypto asset securities for three years, according to the SEC.

“This case serves as another reminder to celebrities: You must disclose to the public who paid you to promote investments in securities, and you cannot lie to investors about a security,” Gary Gensler said in a statement issued by the SEC.

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In addition to supporting EthereumMax on social media, Pierce is accused of misleading the public about his EMAX holdings, according to the SEC. The SEC said Pierce shared misleading screenshots of his EMAX holdings and profits without disclosing that his personal holdings were significantly lower.

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″@espn I don’t need you,” Pierce wrote in a May 2021 Tweet. “I got @ethereum_max I made more money with this crypto in the past month than I did with y’all in a year.”

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Pierce received over $1 million in gross compensation from ESPN in 2020, according to the SEC.

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Attempts to reach Pierce representatives for comment were not immediately successful. A settlement was reached with the SEC in October over Kardashian's alleged touting of EMAX, including the now infamous line, “Are you guys into crypto? ”

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Pierce, Kardashian, Floyd Mayweather Jr., and other EthereumMax boosters were named in a federal class action lawsuit dismissed in December. Plaintiffs' claims did not meet "heightened pleading standards" for fraud cases, according to a judge. In the same month, the lawsuit was refiled.

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SEC enforcement actions in the crypto space have become more aggressive. Do Kwon, CEO of stablecoin issuer Terraform, was charged with fraud by the regulator on Thursday.

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SEC proposed changes to federal custody regulations earlier this week that could materially impact crypto exchanges' ability to custody assets. The SEC settled with crypto exchange Kraken days earlier over its staking service. Over the alleged unregistered offering and sale of securities, the SEC announced charges against crypto lender Genesis and crypto exchange Gemini in January.