The US Securities and Exchange Commission (SEC) has turned its radar on celebrities who endorse crypto projects.
The regulator announced Friday that it has filed suit against retired NBA legend Paul Pierce for plugging EthereumMax (EMAX), a project that aims to build a scalable decentralized finance (DeFi) platform on the Ethereum (ETH) platform. create network.
The SEC says Pierce touted EMAX tokens without disclosing the payment he received for the promotion, and made “false and misleading promotional statements” about the highly volatile crypto asset. Pierce agreed to settle the charges and pay a $1.41 million fine, the regulator said.
SEC Chairman Gary Gensler took the opportunity to warn celebrities that they could be charged for shillings for crypto projects if they fail to disclose promotional payments.
“This case is another celebrity reminder: the law requires you to disclose to the public who and how much you are being paid to promote investment in securities, and you cannot lie to investors when promoting a security. When celebrities endorse investment opportunities, including crypto assets, investors should be careful to research whether the investments are right for them, and they should know why celebrities are making those recommendations.
In late 2022, a US judge dismissed a class action lawsuit alleging that numerous celebrities, including Pierce, had fraudulently promoted EthereumMax. However, the judge said in the case that the defendants may be able to amend their complaint and revive the lawsuit.
EMAX is worth it $0.000000001015 at the time of writing, more than 99% below its all-time high.
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