NBA Hall of Famer Paul Pierce pays SEC $1.4M in fines for EthereumMax securities violations – CryptoNewsTo

NBA Hall of Famer Paul Pierce pays SEC $1.4M in fines for EthereumMax securities violations


At CoinGeek, we’ve told you for years that heads were going to roll as a result of the fraud, lies, and schemes perpetrated on the public in the digital currency space these last few years.

Last week, the U.S. Securities and Exchange Commission (SEC) fined NBA Hall of Famer Paul Pierce more than $1.4 million, including a penalty and disgorgement, for making false and misleading statements while promoting EthereumMax. Pierce failed to disclose that he had received payment for doing so.

Existing securities laws have always applied to digital currencies

Despite the rhetoric to the contrary, existing securities laws, including the Securities Act in the United States, have always applied to blockchain-based digital currencies and tokens. Now that regulators have figured out the game being played, they’re bringing down the hammer.

“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,” SEC Chairman Gary Gensler said.

The Director of the SEC’s Division of Enforcement, Gurbir S. Grewal, clarified: “The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion.”

Note the language: celebrity or any other individual. This means that thousands of people, and most likely tens of thousands, are liable for the same charges given the rampant paid promotion and misleading statements on Twitter and other social media platforms. So-called influencers routinely accept payment to pump coins on YouTube, Twitter, and TikTok without disclosing that they’re being paid to do so.

Once again, we have clear and unequivocal evidence that the code is law narrative is false. The law is the law, and neither blockchain technology nor the so-called anonymous tokens that run on them can protect individuals who break it from the consequences of doing so.

What was EthereumMax?

EthereumMax was touted as a ‘culture token’ that would gain holders special privileges such as access to restaurants and clubs, as well as exclusive casino games on the EthereumMax website.

Dozens of celebrities of varying degrees of fame were involved in promoting EMAX. For example, Kim Kardashian was fined $1.26 million by the SEC for touting it on Instagram despite her stating that it wasn’t financial advice. Other promoters include boxing champion Floyd Mayweather and NFL player Antonio Brown, not to mention endless other lesser-known shills on Twitter and YouTube.

Looking deeper at who was behind EthereumMax, a Forbes investigation uncovered that it was just one of many pump-and-dump schemes perpetrated by Russ David and Justin Maher, two marketers from Connecticut. The pair had also been behind dozens of other pump-and-dump schemes, including Rocket Bunny and Boom Baby. These tokens made both men millionaires, leaving those who bought the tokens holding the bags.

EthereumMax is typical of the ‘value extraction’ mindset endemic in the digital currency space. Few, if any, tokens are useful for anything of value and exist only to enrich their issuers.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple,
Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.



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One thought on “NBA Hall of Famer Paul Pierce pays SEC $1.4M in fines for EthereumMax securities violations

  1. Great read! The article is well-researched and insightful. Adding more visuals in your future pieces could make them even more appealing to a broader audience.

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