What is The Paul Pierce Crypto Scandal?

Paul Pierce is an NBA Hall of Famer who won a championship with the Celtics. He is now facing charges for fraudulent promotion as alleged by the SEC.

In this blog post, we will learn more about Paul Pierce and his involvement with EthereumMax.

EthereumMax: The Crypto That Got Paul Pierce in Trouble

The EthereumMax first came out in 2021. It was a decentralized ERC-20 growth token that operated on the Ethereum blockchain.

On its website, EthereumMax tokens’ description is to “bridge the gap between the emergence of community tokens and the well-known foundational coins of crypto”.

It is designed to be a culture token that would “provide recurring and automatic financial rewards to its holders with a pathway for practical long-term use in everyday life.”

SEC vs. Paul Pierce

On February 17, the Securities and Exchange Commission (SEC) charged NBA player Paul Pierce with fraudulent promotion. According to the SEC, Pierce made false and misleading statements in his promotion of emax tokens. 

Pierce’s public statements regarding the emax tokens brought about the charges related to unlawful touting of cryptocurrency assets.

The former Boston Celtics member endorsed Ethereum Max using his Twitter account. Also, he failed to disclose that he received $244,000 for his endorsement. 

SEC considers this as an offense because he was not transparent with the fact that he was promoting EthereumMax for a profit. 

For the most part, Paul Pierce failed to disclose two things: his payment for the promotion and his actual EMAX holdings. He shared a screenshot on Twitter and declared that he owned a bigger number of EMAX tokens. 

Paul Pierce’s Settlement

In an agreement to settle with the SEC, Paul Pierce will pay $1.4 million for the allegations brought up against him. 

SEC Chair Gary Gensler, said that

“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.”

Other EthereumMax Celebrity Endorsements

Aside from Paul Pierce, there were other celebrity endorsements that resulted in lawsuits such as The Hermes vs Mason Rothschild case. Also, Kim Kardashian also faced the same charges in Oct. 2022 after she posted about EthereumMax tokens on her Instagram page. Additionally, she failed to disclose that The company paid her $250,000 to make a post about Emax tokens. According to the SEC, it is a violation of the federal securities laws. 

Kardashian’s settlement cost her $1.26 million. In addition, she also agreed to pay $260,000 plus interest. 

Furthermore, Floyd Mayweather Jr. chose to face SEC’s lawsuit instead of agreeing to a settlement. In October 2022, Mayweather’s lawyer filed a motion to dismiss the lawsuit. Mayweather strongly claimed that he never made a statement about the Emax token. 

Additionally, Mayweather’s lawyers stated in their motion that the lawsuit “does not identify a single statement made by Mayweather about eMax tokens or EthereumMax.” Furthermore, they also mentioned that “the absence of such allegations is fatal to every claim filed against Mayweather and requires that he be dismissed from this lawsuit.”

Consequences for Paul Pierce

Following his agreement to settle, there are other stipulations that Paul Pierce must follow. Specifically, he cannot promote any kind of crypto asset for three years and needs to cooperate with the ongoing investigation. 

Viral Paul Pierce Crypto Tweet

Pierce got himself into trouble when he tweeted: ″@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.”

Final Word

The Securities and Exchange Commission (SEC) is carrying out a very rigid crackdown on crypto assets. Celebrities need to be very careful with how they endorse digital currencies on their social media profiles. Moreover, they have to be honest in declaring whether it is a paid promotion or not. 

On the other hand, investors need to be very careful in celebrity endorsements of cryptocurrencies since it is not an assurance of the cryptocurrency’s legitimacy and long-term performance.