Paul Anthony Pierce, a former NBA pro and sports analyst, has agreed to settle with the Securities and Exchange Commission for promoting EMAX tokens on social media.
As was previously reported, the same digital asset embroiled influencer Kim Kardashian who had to cough up a $1.26 million penalty for pumping the same crypto. Kardashian then became a top influencer for celebrities not to promote crypto offerings.
EMAX tokens were issued by EthereumMax in 2021. The SEC has deemed these digital assets unregistered securities.
According to the SEC’s filing, Pierce promoted EMAX on his Twitter account, which had around 4 million followers, in exchange for crypto worth approximately $244,116. In total, Pierce received approximately 1,622,319,996,192 EMAX tokens.
At the time of his promotions, Pierce had in excess of approximately 4 million Twitter followers. Pierce did not disclose that he was being paid for the promotion, as required under securities law. Peirce boasted that he held over $2.5 million in EMAX when he reportedly held far less of the crypto.
To settle the enforcement action, Peirce must pay $244,116 – or the amount he was paid plus prejudgment interest of $15,449, and a civil money penalty in the amount of $1,150,000 to the SEC.
For the next three years, Peirce may not receive any compensation from any issuer, underwriter, or dealer for directly or indirectly giving publicity to an offer of a digital asset that is deemed to be a security.
Peirce was not alone in promoting a coin or token offering that the SEC viewed as a securities offering, and he probably had no idea of the ramifications of his actions.
The promotion of EMAX occurred after the SEC warned in its July 2017 DAO Report that crypto offered and sold may be securities. This was a line-in-the-sand moment that the Commission has utilized in determining which ICO it has pursued with an enforcement action.