Paul Pierce, a former NBA star, was sued by the Securities and Exchange Commission of the United States (SEC) for failing to declare the endorsement money he got for supporting the EthereumMax (EMAX) cryptocurrency. According to the SEC announcement, the NBA Hall of Famer has agreed not to "promote any crypto asset securities for three years."
Pierce allegedly received $244,000 in EMAX tokens via the project's Twitter promotion, but he failed to declare the sum. Additionally, he implies through the screenshots that he possesses a significant number of EMAX tokens, despite the fact that his actual holdings are far smaller than what he indicates.
The penalty is "yet another reminder to celebrities," according to SEC Commissioner Gary Gensler, to disclose if they are getting paid to advocate investments. Gary Gensler stated:
"When celebrities endorse investment opportunities, including crypto-asset securities, investors should be careful to research if the investments are suitable for them. They should know why stars are making those endorsements.”
Pierce decided to "not advertise any crypto-asset securities for three years" in addition to agreeing to pay a $1.409 million fine.
As was previously reported, American reality TV star Kim Kardashian also faced SEC charges for endorsing EMAX and settled for $1.26 million.
Recent efforts by the SEC to strengthen cryptocurrency regulations have resulted in a number of lawsuits. Others facing legal issues with the SEC are Kraken and Paxos. This regulator filed a lawsuit against Do Kwon and Terraform Labs yesterday for deceiving investors and issuing unregistered securities.