Cryptocurrency and NFTs are increasingly being endorsed by athletes in recent months. At the same time, a rising tide of lawsuits and accusations of fraud surrounding these innovative (and lightly regulated) financial instruments have begun to percolate into the media covering those endorsing athletes. Boston Celtics alumnus Paul Pierce, according to a new report by New York Times’ David Yaffe-Bellany, finds himself among them.
Pierce, who had previously endorsed a lesser-known form of cryptocurrency called “EthereumMax,” is now embroiled in a lawsuit regarding his activities tied to that form of “crypto” (as it is often called for short) according to Yaffe-Bellany’s article detailing the seedy underside of crypto and NFT endorsement in sporting circles.
“Even celebrities who disclose crypto payments have found themselves in legal trouble,” writes the NYT author.
“Last summer, Ms. Kardashian endorsed EthereumMax in an Instagram post with a brief disclaimer at the bottom: ‘#ad.’” notes Yaffe-Bellany.
“Few crypto insiders had heard of EthereumMax, which is different from Ethereum, one of the most popular crypto platforms.”
“The promotion led to a surge of trading, but EthereumMax’s price soon collapsed,” they related.
“This year, nine traders who had bought EthereumMax sued Ms. Kardashian, the project’s founders, and other promoters, including Mr. Mayweather and the former basketball star Paul Pierce, accusing them of disguising their control over EthereumMax tokens and circulating “misleading” advertisements.”
In essence, the suit claims Pierce et al. used their fame to rope in investors, then cashed out before the spike in value created by their endorsement wore off.
Per the suit, the Truth “received more than 15 trillion EthereumMax tokens in exchange for tweets endorsing the coin.”
“None of the tweets excerpted in the lawsuit mentioned a business relationship with the token’s creators. Shortly after promoting the project, the lawsuit claimed, Mr. Pierce sold his tokens — an apparent ‘pump and dump’ operation in which he profited by encouraging fans to buy the tokens, before selling his own holdings at a higher price.”
Neither Pierce nor any of the other founders of the project reportedly responded to comment on the allegations.
It may well be the case that many public-facing personas connected to crypto and NFT ventures may not be fully aware of many of the negative elements flocking to such investment opportunities.
But even if the claims made by Pierce’s opposing litigants prove to be spurious, the wider sports industry is long overdue for a hard look at what is increasingly becoming a scandalous area to lend their likenesses.
To say nothing of an even greater need regarding their regulation.
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