Kim Kardashian, Floyd Mayweather Jr. and Paul Pierce are among the celebrities sued for allegedly leading investors into a pump and dump scam involving cryptocurrencies.
Celebrities and other defendants are accused of making “false or misleading statements to investors about EthereumMax through social media advertising and other promotional activities,” according to the class-action complaint filed Friday, January 7 in the United States District Court for the district. central California. In addition to the three celebrities, the defendants include the company’s co-founders and other defendants.
The lawsuit claims that EthereumMax is a “speculative digital token created by a mysterious group of cryptocurrency developers”. He adds that celebrities have told their millions of followers on social media to invest in cryptocurrency, only to sell when the price has risen.
Ryan Huegerich, a New York resident, filed the complaint on behalf of himself and others who bought EMAX tokens between May 14, 2021 and June 27, 2021, and lost money, as noted in the filing.
EthereumMax disputed the allegations. “The misleading narrative associated with the recent allegations is rife with misinformation,” a company spokesperson said.
Representatives from Kardashian and Mayweather and Pierce did not immediately respond to requests for comment from the WSJ.
Mayweather promoted EthereumMax in 2021 at a boxing match with YouTube celebrity Logan Paul. Former NBA basketball player and sports commentator Paul Pierce promoted EthereumMax on his Twitter account during a controversy he had waged with the ESPN TV network that is unrelated to the lawsuit. On that occasion he had tweeted:
“. @ espn I don’t need you. I @ethereum_max I have made more money with this crypto in the last month than [sic] with all of you in a year “
Kardashian has promoted the cryptocurrency on Instagram, where she has 278 million followers. The 2021 post from the reality star and businesswoman asking her followers on the platform to join the “Ethereum Max Community” has sparked criticism from the UK financial regulator.
Charles Randell, head of the UK’s Financial Conduct Authority, said in a speech last September that Kardashian’s post may “have been the financial promotion with the largest reach in history.” He also criticized the disclosed announcement, saying the celebrity was not required to tell followers that EthereumMax was a month-old speculative digital token.
“I can’t tell if this particular token is a scam,” Randell told the Cambridge International Symposium on Economic Crime, according to a copy of his remarks posted online. “But social media influencers are routinely paid by scammers to help them pump and dump new tokens on the basis of pure speculation. Some influencers promote coins that just turn out not to exist at all.”
A rep from EthereumMax said at the time that Kardashian’s post “was simply intended to raise awareness of the project and its usefulness.”
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