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

cointelegraph.com:

The United States Securities and Exchange Commission, or SEC, has announced a $1.4-million settlement with former NBA player Paul Pierce for allegedly promoting a token project on social media.

In a Feb. 17 announcement, the SEC said Pierce touted EthereumMax (EMAX) tokens through social media channels without disclosing he had received payment for the promotion and made “false and misleading statements” regarding the project. According to the SEC, promoters paid the former NBA star $244,000 worth of EMAX in addition to him posting messages allegedly showing misleading information about profits on Twitter.

The financial regulator has previously targeted celebrities promoting EthereumMax tokens. The SEC announced a $1.2-million settlement in October 2022 with Kim Kardashian for similar charges as those Pierce was facing — in that case, she failed to disclose a $250,000 payment to publish a story on her Instagram promoting EMAX tokens.

"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," said SEC chair Gary Gensler. "When celebrities endorse investment opportunities, including crypto asset securities, investors should be careful to research if the investments are right for them, and they should know why celebrities are making those endorsements."

Today we announced charges against former NBA player Paul Pierce for touting EMAX tokens on social media without disclosing the payment he received for the promotion and for making false and misleading promotional statements about the same crypto asset.

As part of the settlement, Pierce paid a $1.115