Former NBA player, Paul Pierce is the focus of the latest crypto related SEC scandal

NBA Hall of Famer Paul Pierce has agreed to pay the Securities and Exchange Commission (SEC) a penalty of $1.1 million and disgorge approximately $240,000 over his alleged promotional activities of EthereumMax (EMAX) tokens. The SEC said that Pierce failed to disclose that he was paid with EMAX tokens worth more than $244,000 for his promotion of the crypto security product. As part of the settlement, Pierce is prohibited from promoting any crypto asset securities for the next three years. The SEC also alleged that Pierce misled the public with false screenshots of his own EMAX holdings and profits. The SEC said that while Pierce tweeted that he had made more money from EMAX in a month than from his ESPN contract in a year, his gross compensation from ESPN was actually more than $1 million in 2020. 

The SEC’s action against Pierce follows similar enforcement against other celebrities, such as Kim Kardashian, Floyd Mayweather Jr., and others, who have been charged with unlawfully touting crypto securities. The SEC has been increasingly active in the crypto space, with recent cases against stablecoin issuer Terraform and its CEO Do Kwon, crypto exchange Kraken, crypto lender Genesis, and crypto exchange Gemini. 

Furthermore, we all know about the infamous story regarding SBF. The SEC charged Samuel Bankman-Fried, CEO and co-founder of crypto trading platform FTX Trading Ltd., with orchestrating a scheme to defraud equity investors. According to the complaint, Bankman-Fried raised over $1.8 billion from investors, touting FTX as a safe, responsible platform and claiming it utilized sophisticated risk measures. In reality, the SEC alleges that Bankman-Fried diverted customer funds to his privately-held crypto hedge fund, Alameda Research LLC, and gave them preferential treatment on the platform. He also allegedly used commingled FTX customer funds to make undisclosed venture investments, real estate purchases, and large political donations. All of these business doings seemed uncontroversial at the time, considering SBF achieved “poster-child” status due to his selfless-seeming acts. Bankman-Fried faces charges of violating the anti-fraud provisions of the Securities Act of 1933, and the Securities Exchange Act of 1934. On top of that, the SEC is seeking injunctions, disgorgement of ill-gotten gains, a civil penalty, and an officer and director bar. The SEC’s investigation is ongoing and they are being assisted by the U.S. Attorney’s Office for the Southern District of New York, the FBI, and the Commodity Futures Trading Commission (CFTC). 

We’ve seen how the crypto world confides in public figures like Paul Pierce, Kim Kardashian, and Floyd Mayweather Jr., but they’re not alone. The shortlist of other victims includes but isn’t limited to: Tom Brady, Gisele Bundchen, Stephen Curry, David Ortiz, Shaquille O’Neal, Naomi Osaka, Trevor Lawrence and many others. These celebrities/athletes likely lost tens of millions in the FTX crash. And because of this, these individuals likely have an inside look into the behind-the-scenes conversations and propositions between SBF and his counterparts that could hold up in a suit against SBF and Alameda. Will they pursue it? It isn’t likely, but with all of this happening, we can be confident in saying this: The crypto world is and will be going through a major shift. Regulations and securities are tightening around the crypto space, and we can expect more government involvement in the coming months that will drastically change the cryptocurrency space as we know it today.