A class-action lawsuit has named Kim Kardashian, Floyd Mayweather and basketball star Paul Pierce as defendants for promoting a cryptocurrency called EthereumMax. According finbold, the authors sued the celebrities and as-yet-unnamed entities behind the tokens for causing the Ethereum imitation’s value to rise so that “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 are accusing the defendants of perpetrating a “pump and dump” scheme, in which investors sell their shares to make a lot of money after orchestrating an increase in their value. The lawsuit claims the coin rose 632% in value after Mayweather and Pierce promoted it – the boxing star wore shorts with the URL EthereumMax during his exhibition match with Logan Paul, while Pierce tweeted about it.
Meanwhile, Kardashian posted about EthereumMax on Instagram Stories, telling followers that she heard from her friends and linking to her website. According morning appointment, 19 percent of survey respondents who said they had heard of Kardiashian’s post invested in EthereumMax as a result. The lawsuit claims that the day after Kardashian’s post, the token’s value dropped by 98%. Furthermore, the coin’s creators reportedly sold their shares before the price drop, as shown by their portfolio activities.
Celebrities have been promoting cryptocurrency tokens for some time and even creating their own. This isn’t the first or last time they’ll be caught up in controversies over a token – Mayweather, for example, was loaded by the Securities and Exchange Commission in 2018 for failing to disclose that it received $100,000 to promote Centra Tech’s 2017 initial coin offering. Two of Centra Tech’s founders were arrested for securities fraud and wire fraud, with the SEC accusing them to “promote non-existent relationships between Centra and well-known financial institutions” in an effort to entice people to invest in the ICO.
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