A class action lawsuit has named Kim Kardashian, Floyd Mayweather and basketball star Paul Pierce as defendants for promoting a cryptocurrency called EthereumMax. According to Finbold, the plaintiffs sued the celebrities and as yet unidentified entities behind the tokens for skyrocketing the value of the imitation Ethereum so “they could sell their share of the float at a profit.” The lawsuit lists anyone who invested in the token between May 14 and June 27, 2021 as a defendant.
As Gizmodo explains, the plaintiffs accuse the defendants of perpetrating a “pump and dump” scheme in which investors sell their shares to earn a lot of money after orchestrating an increase in its value. The lawsuit says the coin’s value rose 632% after Mayweather and Pierce promoted it — the boxing star wore shorts with the URL EthereumMax in her exhibition match with Logan Paul, while that Pierce tweeted about it.
Meanwhile, Kardashian posted an EthereumMax post on Instagram Stories, telling her followers that she heard about it from her friends and linking to her website.
According to Morning Consult, 19% of survey respondents who said they had heard of Kardiashian’s position invested in EthereumMax accordingly. The lawsuit says the day after Kardashian’s post, the token’s value dropped 98 percent. Moreover, the creators of the coin are said to have sold their shares before the prices drop, as shown by their portfolio activities.
Celebrities have been promoting cryptocurrency tokens for quite some time now and are even creating their own. This isn’t the first time or the last that they will be caught up in token controversies -
Mayweather, for example, was charged by the Securities and Exchange Commission in 2018 for failing to disclose that he was paid $ 100,000 to promote Centra Tech’s initial coin offering in 2017. Two of the founders of Centra Tech were arrested on charges of securities fraud and wire fraud, with the SEC accusing them of “bragging about non-existent relationships between Centra and well-known financial institutions” in an attempt to get people to invest in the ICO.