US Regulators Charges NBA Player Paul Pierce for Deceptive Promotion of Crypto Assets
The US securities exchange commission sanctioned ex-NBA player Paul Pierce for deceptive marketing for the crypto asset EthereumMax. A report from the SEC on February 17 ordered Pierce to pay a court fine of $1.4M. The report revealed that Pierce was accused of providing the consumer with misleading information concerning EthereamMax that was against the securities laws.
Also, Pierce was charged for failing to report a $244000 crypto transaction he was compensated for promoting EthereamMax on his social media platform.
SEC Involvement in Crypto Regulation
In 2021, the US SEC filed charges against NBA legend Paul Pierce for promoting EthereamMax using fake information. The probing team submitted a screenshot of Pierce’s Twitter account revealing the information he used to promote EthereumMax (EMAX) to the SEC.
The screenshot contained Pierce EMAX token details, including a profit of $244000 and the initial amount of his account holdings. Also, the screenshot demonstrated Pierce’s efforts in promoting EMAX by providing user instructions, including purchase guides.
Pierce’s move was against the SEC anti-touting and anti-fraud laws that discourage investors from misleading the consumer during the bargaining for a purchase or a sale. The SEC demanded Pierce to pay a fine of $1.1M and refrain from engaging in the deceptive promotion of crypto assets.
In his response, Pierce agreed to pay the fine and avoid engaging in unlawful crypto marketing activity for three years.
Why are Firms Hiring Celebrities to Market Crypto Assets?
In October last year, Kim Kardashian settled a $1.26 penalty for misrepresenting facts concerning the EtheareumMax product. The Kardashian case mirrored the Floyd Mayweather Jr saga, who engaged in crypto-related crime. Mayweather was accused of luring the investors into a fraudulent scheme exposing them to huge losses.
Following the Kardashian and Pierce case, the chair of the US SEC, Gary Gensler, anchored the Securities laws that demand that celebrities disclose all the information concerning the product and the compensation details for marketing the digital asset.
Gensler mandated celebrities to conduct extensive research concerning the marketing opportunity before signing the agreement. Gensler’s February 17 statement tasked the celebrities to scrutinize hyped celebrity endorsement plans in crypto assets to make informed decisions before committing to the project.
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