SEC chair issues warning to celebrities promoting crypto amid latest enforcement action

The United States Securities and Exchange Commission, oregon SEC, has announced a $1.4-million colony with erstwhile NBA subordinate Paul Pierce for allegedly promoting a token task connected societal media.

In a Feb. 17 announcement, the SEC said Pierce touted EthereumMax (EMAX) tokens done societal media channels without disclosing helium had received outgo for the promotion and made “false and misleading statements” regarding the project. According to the SEC, promoters paid the erstwhile NBA prima $244,000 worthy of EMAX successful summation to him posting messages allegedly showing misleading accusation astir profits connected Twitter.

The fiscal regulator has antecedently targeted celebrities promoting EthereumMax tokens. The SEC announced a $1.2-million settlement successful October 2022 with Kim Kardashian for akin charges arsenic those Pierce was facing — successful that case, she failed to disclose a $250,000 outgo to people a communicative connected her Instagram promoting EMAX tokens.

"This lawsuit is yet different reminder to celebrities: The instrumentality requires you to disclose to the nationalist from whom and however overmuch you are getting paid to beforehand concern successful securities, and you can’t prevarication to investors erstwhile you tout a security," said SEC seat Gary Gensler. "When celebrities endorse concern opportunities, including crypto plus securities, investors should beryllium cautious to probe if the investments are close for them, and they should cognize wherefore celebrities are making those endorsements."

Today we announced charges against erstwhile NBA subordinate Paul Pierce for touting EMAX tokens connected societal media without disclosing the outgo helium received for the promotion and for making mendacious and misleading promotional statements astir the aforesaid crypto asset.

— U.S. Securities and Exchange Commission (@SECGov) February 17, 2023

As portion of the settlement, Pierce paid a $1.115 cardinal punishment to the SEC and astir $240,000 successful disgorgement, and agreed to not beforehand immoderate crypto projects considered to beryllium securities for 3 years. SEC enforcement manager Gurbir Grewal added:

"Investors are entitled to cognize whether a promotor of a information is unbiased, and Mr. Pierce failed to disclose this information."

Related: Breaking: Circle squashes rumors of planned SEC enforcement action

The determination from the SEC was the latest successful what galore critics person called a “regulation by enforcement” attack to crypto projects the bureau considered securities. On Feb. 9, the fiscal regulator announced that it had reached a colony with Kraken, successful which the crypto speech agreed to halt offering staking services oregon programs to U.S. clients.