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.
Like Gizmodo explains, the plaintiffs accuse the defendants of having perpetrated 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 she heard about it from her friends and linking to her website. According to Morning consultation19% 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. Additionally, the coin’s creators are said to have sold their shares before the prices fell, as shown by their portfolio activities.
Celebrities have been promoting cryptocurrency tokens for quite some time and are even creating their own. This isn’t the first or last time they’ll be caught up in token controversies – Mayweather, for example, has been accused 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 Centra Tech’s founders were arrested on charges of fraud in securities and electronic fraud, with the SEC to accuse them to “brag about the non-existent relationship between Centra and well-known financial institutions” in order to encourage people to invest in the ICO.
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