Finance

Former Boston Celtics star Paul Pierce settles with SEC over crypto violations

Paul Pierce #34 of the Boston Celtics celebrates after a play against the Los Angeles Lakers in the fourth quarter during Game Five of the 2010 NBA Finals on June 13, 2010 at TD Garden in Boston, Massachusetts.
Elsa | Getty Images

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

The action against Pierce involves his public statements about EthereumMax, or EMAX, the same crypto security product that the SEC charged influencer Kim Kardashian with unlawfully touting.

Pierce promoted EthereumMax tokens on Twitter while failing to disclose that he was paid for his promotion with EMAX tokens worth over $244,000, the SEC alleged. Pierce did not admit or deny wrongdoing as part of the settlement and will pay a $1.1 million penalty and disgorge “approximately $240,000,” the SEC said.

Pierce is also barred from promoting any crypto asset securities for three years, 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,” SEC Chairman Gary Gensler said in a statement.

Pierce’s social media support for EthereumMax also involved allegedly misleading the public about his EMAX holdings, according to the SEC. Pierce allegedly shared misleading screenshots of his EMAX holdings and profits, the SEC said, without disclosing that his personal holdings were actually far lower.

“@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 then I did with y’all in a year.”

The SEC said Pierce’s gross compensation from ESPN was over $1 million in 2020.

Representatives for Pierce did not immediately respond to a request for comment. Kardashian settled with the SEC in October for $1.2 million over her alleged touting of EMAX, which included a now infamous line, “Are you guys into crypto????”

A federal class action lawsuit naming Pierce, Kardashian, Floyd Mayweather Jr., and other EthereumMax boosters was dismissed in December. A judge found that the plaintiffs’ allegations didn’t meet the “heightened pleading standards” that fraud cases demand. The lawsuit was refiled the same month.

The SEC has gotten more aggressive with its enforcement action in the crypto space. On Thursday, the regulator charged stablecoin issuer Terraform and CEO Do Kwon with fraud.

Earlier this week, the SEC proposed changes to federal custody regulation that could materially impact the way crypto exchanges are able to custody certain assets. Days earlier, crypto exchange Kraken settled with the SEC over its staking service. And in January, the SEC unveiled charges against crypto lender Genesis and crypto exchange Gemini over the alleged unregistered offering and sale of securities.

— CNBC’s Rebecca Picciotto contributed to this report.

WATCH: SEC Chair Gensler breaks down charges against Kim Kardashian

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