Former NBA Player Faces Lawsuit For EMAX Token Promotion

American former professional basketball player Paul Pierce has come under the radar of the United States regulator, the Securities and Exchange Commission (SEC) for promoting EthereumMax (EMAX) tokens. At the same time, the SEC has seized the opportunity to caution other celebrities who might want to involve themselves in crypto promotions. 

Gary Gensler, the Chairman of the SEC said;

“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,” speaking of the fact that Pierce had failed to share such crucial details with the public, hence, leaving them with distorted information.

The NBA Hall of Famer touted the EMAX token through social media platforms without telling his audience that he had received payment worth more than $244,000 for the particular token.

Pierce went ahead to post false statements about profits made on Twitter. He went as far as posting a “screenshot of an account showing large holdings and profits without disclosing that his own personal holdings were in fact much lower than those in the screenshot.”

Celebrity Settles Violation Charges For Crypto Promotion

The charges against him include the violation of anti-touting and antifraud provisions of the federal securities laws.

When levied with the charges, the former Boston Celtics player did not attempt to deny or even admit the regulator’s findings. As a form of settlement, Pierce has agreed to pay $1.4 million in penalties, disgorgement, and interest. Also, he has pledged to not promote any ‘crypto asset securities’ in the next three years.  

Kim Kardashian faced a similar lawsuit last year for promoting the EMAX token and eventually she was asked to pay $1.26 million in fines, disgorgement, and interest. Bored Ape Yacht Club (BAYC) collection issuer Yuga Labs and a handful of celebrities including Snoop Dogg, Jimmy Fallon, Kevin Hart, Steph Curry, and Justin Bieber were also dragged for endorsing the platform’s NFT collection.

The SEC Chair encourages investors to always do a thorough investigation to understand the risks involved in any investment which they decide to undertake.

“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.”