‘The Truth’ Has Not Set Paul Pierce Free as the NBA Legend Must Pay a $1.4 Million Penalty for False Crypto Promotions
NBA players, like any other athletes, might be the best in the world at their sport, but that doesn’t make them the best outside of their sport. Paul Pierce is a Boston Celtics legend. However, like many other athletes, the retired athlete made a costly mistake by promoting crypto.
Let’s look at the debacle surrounding Paul Pierce, crypto, and the $1.4 million penalty he’s paying for it.
Paul Pierce’s crypto trouble
Endorsements are something every athlete or celebrity can participate in — good ways to make popular athletes a lot of money.
According to law firm Winston & Strawn, in May 2021, Pierce decided to endorse the EMAX crypto token by tweeting about it. Notably, the NBA Hall of Famer referenced ESPN, as the media giant had fired him a month ago.
Pierce started his tweet by saying, “ESPN, I don’t need you.” He then went on to endorse the EMAX crypto token before ending the tweet by saying, “TRUTH shall set u Free.” This was a reference to his nickname, “The Truth,” and unfortunately, he was allegedly not telling the truth.
The Securities and Exchange Commission, or SEC, investigated Pierce and other celebrities regarding their involvement with the EMAX crypto token.
What the SEC found and Paul Pierce’s charges
The SEC discovered that EthereumMAX, the crypto company behind the EMAX crypto token, allegedly paid Pierce $244,000 in tokens to promote the token on his social media. On top of that, The Truth allegedly misled the public about his success with the EMAX crypto token, as he had also tweeted a screenshot of a crypto account with large holdings and profits. He didn’t disclose that his personal crypto account had smaller holdings and profits.
Although crypto is a relatively new topic, the SEC also decided that crypto actually counts as a security thus it can be regulated by the SEC. The law was passed in the ’30s. It essentially says people can’t promote a security without disclosing they were paid, how much they were paid, and who paid them. The law also says people can’t make false statements when they promote a security, and that includes crypto too.
As such, the SEC charged Pierce with failure to disclose those facts, as well as making false statements about crypto. However, the two parties seem to have settled the charges already.
The former Boston Celtics forward agreed to pay $1.1 million in penalties, as well as about $240,000 in “disgorgement and prejudgment interest.” It adds up to roughly $1.4 million, and Pierce also agreed not to promote any crypto for the next three years. He still has a net worth of about $70 million, so this won’t likely affect his wealth too much.
Other famous athletes have made bad bets on crypto
The SEC is well aware of celebrities and athletes endorsing crypto. The agency even made a PSA about it. Unfortunately, the biggest implosion in terms of athlete-related crypto has already happened. FTX is a crypto company endorsed by many athletes, including big names like Tom Brady and Steph Curry.
FTX even bought the naming rights to the Miami Heat’s arena. The company came crumbling down in late 2022 as it became clear that the crypto token is next to worthless. The company filed for bankruptcy. Its co-founder, Sam Bankman-Fried, was arrested for various charges.
The collapse of FTX may have been the most dramatic. But it’s not the first, and it won’t be the last.