Kim Kardashian, Floyd Mayweather Jr. and Paul Pierce are among a number of celebrities prosecuted for allegedly leading investors into a cryptocurrency “pump and dump” scam.
The celebrities and other defendants are accused of making “false or misleading statements to investors about EthereumMax through social media ads and other promotional activities,” according to the class action lawsuit filed last Friday before the U.S. District Court for the Central District of California. In addition to the three celebrities, the defendants include the co-founders of the company and others.
The lawsuit alleges that EthereumMax is a “speculative digital token created by a mysterious group of cryptocurrency developers”. He says celebrities asked their millions of social media followers to buy the cryptocurrency, only to sell it when the price was inflated.
Ryan Huegerich, a New York resident, filed the lawsuit on behalf of himself and others who purchased EMAX tokens between May 14, 2021 and June 27, 2021, and lost money, according to the folder.
EthereumMax has disputed the claims. “The misleading narrative associated with the recent allegations is riddled with disinformation,” a company spokesperson said.
Representatives of Ms. Kardashian and Messrs. Mayweather and Pierce did not immediately respond to requests for comment.
Mr Mayweather promoted EthereumMax in 2021 while participating in a boxing match with YouTube celebrity Logan Paul. Former NBA player and sports commentator Paul Pierce promoted EthereumMax on his Twitter account during an unrelated dispute he had with ESPN at the time.
“[email protected] I do not need you. I have @ethereum_max I made more money with this crypto in the last month so [sic] I did it with all of you in a year ”, Mr. Pierce tweeted.
Ms Kardashian has been promoting the cryptocurrency on Instagram, where she has 278 million followers. The reality TV star and entrepreneur’s 2021 post asking his subscribers on the platform to join “the Ethereum Max community” has drawn criticism from the UK’s financial watchdog.
Charles Randell, head of the UK’s Financial Conduct Authority, said in a September speech that Ms Kardashian’s post may “have been the biggest financial advancement in history”. He also criticized the leaked ad, saying Ms Kardashian was under no obligation to tell her subscribers that EthereumMax was a month-old speculative digital token.
“I can’t say if this particular token is a scam,” Mr. Randell told the Cambridge International Symposium on Economic Crime, according to a copy of his remarks posted online. “But social media influencers are regularly paid by crooks to help them pump and dump new tokens on the back of pure speculation. Some influencers promote pieces that just turn out to be non-existent.
A representative from EthereumMax said at the time that “Ms. Kardashian’s post was simply intended to publicize the project and its usefulness”.
Write to Talal Ansari at [email protected]
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