Paul Pierce, a former NBA player, has pleaded guilty and agreed to pay a hefty fine of $1.4 million for allegedly mishandling EMAX tokens on social media, according to the US Securities and Exchange Commission (SEC).
The SEC accused Pierce of promoting EthereumMax (EMAX) tokens on Twitter without disclosing to users that he was paid $244,000 to promote the cryptocurrency asset, and making false and misleading claims about the product.
Pierce even posted an image of his bank account with a higher balance than his actual account, which was deemed misleading by the regulator.
As part of the settlement agreement, Pierce has pleaded guilty and will pay the $1.4 million fine. In response to the dispute, SEC Chairman Gary Gensler has issued a statement reminding celebrities of their legal obligation to disclose their payment when promoting securities.
He also urged investors to be vigilant and conduct thorough research on celebrity-endorsed investment opportunities, particularly those involving crypto assets.
Interestingly, this is not the first time that the SEC has issued a fine related to celebrity promotion of EMAX tokens. American reality TV star Kim Kardashian faced a similar $1.2 million settlement agreement with the SEC last year for promoting the EMAX token on a paid basis.
The SEC’s actions serve as a warning to celebrities and influencers who endorse investment opportunities to be transparent about their compensation and to avoid making false and misleading claims.