The lawsuit suggests that Kim Kardashian and Floyd Mayweather artificially helped “pump” the value of little-known cryptocurrency EthereumMax before “dumping” it.
A new lawsuit accuses Kim Kardashian and Floyd Mayweather of running a cryptocurrency scam, allegedly defrauding thousands of potential investors through social media.
According to CNBC, both celebrities used their Twitter and Instagram feeds to shill little-known cryptocurrency EthereumMax to their millions of their followers.
The class action, filed Friday in U.S. District Court for the Central District of California, accuses EthereumMax and its celebrity influencers of conspiring to artificially inflate the currency’s worth by making “false or misleading statements” online.
Kardashian, for instance, tried to draw her fans’ attention to the brand last year.
“Are you guys into crypto????” Kardashian wrote on Instagram. “This is not financial advice but sharing what my friends just told me about the Ethereum Max token!”
Kardashian, adds CNBC, added the hashtag “#ad” to her post, suggesting she was paid to advertise EthereumMax.
Floyd Mayweather, to, used his social media clout to advertise Ethereum.
During his stunt-boxing-match with YouTube personality and amateur boxer Logan Paul, Mayweather publicly endorsed EthereumMax, even allowing people to pay for the fight’s pay-per-view using it.
Somewhat interestingly, CNBC observes that Mayweather also tried to market EthereumMax at a “major bitcoin conference in Miami.”
However, Mayweather’s advances were not appreciated; the boxer was booed off stage.
Now, the federal lawsuit alleges that Mayweather, Kardashian, and other celebrity influencers simply used EthereumMax as an opportunity to make quick money—even at the expense of other investors.
“Defendants touted the prospects of the Company and the ability for investors to make significant returns due to the favorable ‘tokenomics’ of the EMAX Tokens,” the lawsuit claims. “In truth, Defendants marketed the EMAX Tokens to investors so that they could sell their portion of the Float for a profit.”
Despite celebrity support for EthereumMax, the cryptocurrency has lost almost all of its value since summer. According to CNBC, it has lost 97% of its value since early June, leading investors to call it a “pump and dump” scheme.
“The Promoter Defendants’ improper promotional activities generated the trading volume needed for all the Defendants to offload their EMAX Tokens onto unsuspecting investors,” the lawsuit claims. “While Plaintiff and Class members were buying the inappropriately promoted EMAX Tokens, Defendants were able to, and did, sell their EMAX Tokens during the Relevant Period for substantial profits.”
“This meteoric rise did not last long, and EthereumMax began to deflate immediately after Defendant Kardashian’s post,” the complaint states. “On July 15, the price of the EMAX Token hit its all-time low: $0.000000017 per unit, a 98% drop from which it has not been able to recover.”
The lawsuit seeks restitution for EthereumMax-related losses, punitive damages, and a court order preventing EthereumMax from engaging in further “unlawful, unfair, and/or fraudulent acts or practices.”
Sources
Kim Kardashian and Floyd Mayweather sued by investors over alleged crypto scam
Kim Kardashian, Floyd Mayweather Sued by Cryptocurrency Investors
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