The U.S. Securities and Exchange Commission delivered another blow to celebrity-backed crypto promotions on February 17, 2023, announcing charges against NBA Hall of Famer Paul Pierce for failing to disclose that he was paid to promote EthereumMax (EMAX) tokens on social media.
TL;DR
- SEC charged Paul Pierce for unlawfully touting EMAX tokens without disclosing $244,000+ in compensation
- Pierce tweeted misleading statements about his crypto holdings and profits
- He agreed to a $1.4 million settlement ($1.1M penalty + $240K disgorgement)
- Pierce banned from promoting crypto asset securities for three years
- This follows the SEC’s $1.2 million settlement with Kim Kardashian over the same EMAX token in October 2022
The Charges Against Paul Pierce
The SEC’s enforcement action centers on Pierce’s promotion of EthereumMax tokens, a crypto asset security that gained significant attention in 2021 through celebrity endorsements. According to the SEC’s order, Pierce received more than $244,000 worth of EMAX tokens as compensation for promoting the project on Twitter, yet he never disclosed this payment arrangement to his followers.
Perhaps most damning was a tweet Pierce posted in May 2021, directed at his former employer ESPN: “@espn I don’t need you. I got @ethereum_max I made more money with this crypto in the past month then I did with y’all in a year.” The SEC noted that Pierce’s actual compensation from ESPN exceeded $1 million in 2020, and his personal EMAX holdings were significantly lower than what he displayed in a misleading screenshot shared with followers.
A Pattern of Celebrity Enforcement
The Pierce case is part of a broader SEC crackdown on celebrity crypto endorsements that has intensified under Chair Gary Gensler. EthereumMax is the same token at the center of the SEC’s October 2022 action against Kim Kardashian, who settled for $1.26 million after promoting EMAX to her millions of Instagram followers without disclosing a $250,000 payment she received.
“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,” Gensler said in a statement accompanying the announcement.
The Settlement Terms
Pierce agreed to settle the charges without admitting or denying the SEC’s findings. The total financial penalty amounts to approximately $1.4 million, broken down as a $1.1 million civil penalty plus roughly $240,000 in disgorgement and prejudgment interest. Additionally, Pierce consented to a three-year prohibition on promoting any crypto asset securities, effectively ending any future paid crypto endorsement deals in the near term.
The settlement sends a clear signal to other public figures involved in crypto promotions. Since the FTX collapse in November 2022, regulators have ramped up scrutiny of celebrity endorsements in the crypto space, treating undisclosed paid promotions as violations of federal securities laws.
Market Context
The enforcement action came on a day when Bitcoin was trading at approximately $24,500, having recently touched $25,000 for the first time since August 2022. The broader crypto market had been rallying in early 2023, with BTC gaining roughly 50% year-to-date from its post-FTX lows near $16,500. Ethereum was trading around $1,695. Despite the positive price action, regulatory headwinds continued to mount as U.S. agencies escalated their oversight of the digital asset industry.
Why This Matters
The Paul Pierce settlement represents more than just a single enforcement action — it signals the SEC’s determination to hold influential individuals accountable for how they promote crypto assets to retail investors. With the memory of FTX’s collapse still fresh and multiple celebrity-endorsed tokens having lost most of their value, regulators are drawing a harder line on disclosure requirements. For everyday investors, the case is a reminder that celebrity endorsements of crypto projects should never be taken at face value — and that behind many flashy social media posts lies an undisclosed paid promotion.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.
$244K to shill EMAX and it cost him $1.4M. the math on celebrity crypto endorsements never works out
right after the Kim Kardashian $1.2M settlement too. SEC is making an example out of these one by one
kim k set the precedent and now pierce pays 1.4m for the same token. SEC working through the celebrity list like a checklist
the ROI on celebrity shills is always negative for everyone involved. token dies, celeb pays fine, retail holds bags
mev_squirrel celeb promotions always end with the token dead and retail holding the loss
celeb_shill is right. the ROI on celebrity shills is always negative for everyone involved. token dies, celeb pays fine, retail holds bags
the real question is how many celebs took crypto deals and have not been caught yet. $244k is probably small compared to what was paid under the table
Jamal W. the under the table number is probably 10x what the SEC caught. pierce was just the one who got sloppy with disclosures
Adaeze O. 10x is conservative. every nba player was shilling some token in 2021. pierce just got caught being sloppy
3 year ban from promoting crypto is the part that actually hurts. these guys make more from endorsements than the settlement costs them
kim k paid 1.2M for EMAX, pierce paid 1.4M for EMAX. SEC working through the celebrity list like a grocery checklist
Kim K paid 1.2M for EMAX, Pierce paid 1.4M for EMAX. SEC working through the celebrity list like a grocery checklist
1.1M penalty plus 240K disgorgement on 244K of EMAX tokens. SEC made sure the fine was painful enough to actually deter this stuff
3 year ban is a slap on the wrist. these guys will just use proxy accounts or have their managers post for them
3 year ban from promoting crypto is nothing. these guys will be back shilling the next cycle through proxy accounts
Nadia V. is spot on. 3 year ban is a slap on the wrist. these guys will just use proxy accounts or have their managers post for them
same playbook as the kardashian case. undisclosed pay for token promo keeps getting hit
$244k to shill EMAX and it cost him $1.4M. every celebrity who took a crypto deal in 2021 is sweating reading this
disclosure_frog the real question is how many other athletes took EMAX money and havent been charged yet. pierce and kim k were just the sloppy ones
disclosure_frog 244k for the emax promo and it ended with 1.4m fine plus three year ban
emx_fine the real losers are the people who bought EMAX because pierce tweeted about it. they got nothing back
disclosure_frog the math is brutal. 244k in, 1.4m out, plus legal fees. EMAX probably went to zero on top of that
three year ban and he probably made the money back on a single NBA endorsement deal. SEC penalties are just a licensing fee for celebs
finra_watcher nailed it. 1.4m is a licensing fee for these guys. pierce made that back on one NBA season sideline gig
the EMAX token is probably at zero now and the people who bought it got nothing. pierce paid a fine, retail paid everything