The SEC warns crypto-friendly celebrities, fining NBA legend Paul Pierce $1.4 million for promoting EthereumMax

The U.S. Securities and Exchange Commission (SEC) closely monitors celebrities who promote cryptocurrency initiatives.

The regulator said on Friday that it has filed accusations against former NBA star Paul Pierce for promoting EthereumMax (EMAX), a project that aspires to build a scalable decentralized finance (DeFi) platform on the Ethereum (ETH) network.

According to the SEC, Pierce promoted EMAX tokens without disclosing the compensation he received for the campaign and made “false and misleading promotional representations” about the highly volatile crypto asset. According to the agency, Pierce agreed to resolve the accusations and pay a $1.41 million fine.

Gary Gensler, chairman of the Securities and Exchange Commission, used the occasion to warn celebrities that they might be prosecuted with shilling for crypto projects if promotional payments are not disclosed.

“This case is just another warning to celebrities that the law compels them to declare to the public the source and amount of compensation they receive for promoting investment in securities, and that they cannot mislead to investors. When celebrities recommend investment options, especially crypto asset securities, investors should do thorough study to see whether the investments are suitable for them, and they should be aware of the motivations behind the celebrities’ endorsements.”

A US court dismissed a class action complaint claiming various celebrities, including Pierce, illegally promoted EthereumMax towards the end of 2022. Nevertheless, the court said in the case notes that the defendants might possibly revive the litigation by amending their complaint. At the time of writing, EMAX is valued $0.000000001015, down almost 99% from its all-time high.

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