Pierce's posts came shortly after he was fired as a pundit for ESPN because of an Instagram Live video that showed him disregarding COVID rules while in a room with exotic dancers.
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Former NBA star Paul Pierce is going to pay $1.4 million to the SEC in connection with the promotion of Ethereum Max.
That's substantially more than the $1.26 million that Kim Kardashian had to pay for a similar offense — and comes with a similar three-year ban on endorsing digital assets online.
Pierce's posts came shortly after he was fired as a pundit for ESPN because of an Instagram Live video that showed him disregarding COVID rules while in a room with exotic dancers.
One of his tweets that endorsed EMAX to his four million followers said:
"ESPN I don't need you. I got Ethereum Max. I made more money with this crypto in the past month than I did with y'all in a year."
According to the SEC, Pierce had failed to disclose that he had been paid $244,000 worth of EMAX tokens in exchange for his endorsement.
And to make matters worse, he had posted screenshots showing a large EMAX balance, and healthy profits, that had no relation to his own account. Instead, the pictures had been provided for promotional purposes by somebody else.
The settlement consists of a $1.1 million penalty and a further $244,000 in disgorgement and interest — and as a result, Pierce doesn't have to admit or deny the agency's findings.
Now that the case involving Pierce has come to a conclusion, SEC chairman Gary Gensler said:
"When celebrities endorse investment opportunities, including cryptoasset securities, investors should be careful to research if the investments are right for them, and they should know why celebrities are making those endorsements."
'False and Misleading'
The SEC took particular issue with Pierce's claim that he had made more money from Ethereum Max than as an analyst for ESPN.
The former NBA champion had earned about $1 million from the sports network over the previous year, but his payment for promoting EMAX amounted to just $46,000.
And while he had boasted that he intended to increase his holdings of Ethereum Max substantially, Pierce was actually selling these tokens behind the scenes.
Pierce's posts, and others from Kardashian and the boxer Floyd Mayweather, coincided with a dramatic surge in the value of EMAX.
But CoinMarketCap data shows that it's fallen by 99.89% since hitting an all-time high back in May 2021.
EMAX's fully diluted market cap now stands at a paltry $2,040,786 — with trading volumes over the past 24 hours amounting to just $858.
Aggrieved Ethereum Max investors have been attempting to sue Pierce, Kardashian and Mayweather over their social media endorsements.
But last December, a judge dismissed their lawsuit because it wasn't clear that the plaintiffs had actually seen these posts.
The judge added that the plaintiffs also failed to show that the endorsers intended to mislead other investors, rather than simply acting in their own best interests.
Despite the name, Ethereum Max is not affiliated with Ethereum, the world's second-largest cryptocurrency.
