Last updated on February 25, 2023
Paul Pierce, “The Truth”, a former NBA Legend, 10-time All-Star, 4-time All-NBA team member 1-time NBA champion, and Certified Celtics legend is now in hot water with the SEC. And no, not the Southeastern Conference that Pierce used to play for during his time at the University of Kansas. Instead, it’s the federal agency, the Securities and Exchange Commission. So what exactly did an ex-pro basketball player do to get investigated by a federal agency?
The answer: cryptocurrency. The creators of the cryptocurrency Etheruem (Max) paid Pierce to promote it, receiving $244,000 in ‘tokens’. But Pierce never disclosed that EthereumMax paid him in his promotions. Thus the SEC charged Pierce with failing to disclose the tokens payment he received for plugging it on social media. Still, Pierce was also charged with making misleading statements in his advertisement for EMAX. It seems that Pierce posted a screenshot of an account showing more in EMAX holdings and profits than his account had. Because of this, the SEC found that Pierce violated anti-touting and antifraud provisions of federal securities laws. They fined Pierce a whopping $1.4 million, with Pierce also agreeing not to promote cryptocurrency for 3 years.
The case has echoes of another case from just last October. Kim Kardashian, also promoting EMAX, was fined $1.26 million based on similar charges. Pierce and Kardashian were sued together for their involvement in the scheme last year.
In a statement on the case, SEC Chair Gary Gensler had this to say: “This case is yet another reminder to celebrities: The law requires you to disclose to the public from whom and how much you are getting paid to promote investment in securities, and you can’t lie to investors when you tout a security.” That sums the case up pretty well as another example of how the cryptocurrency industry is shaky at best and downright deceptive at worst.