Kim Kardashian and former boxer Floyd Mayweather are being sued for promoting a little-known cryptocurrency accused of scam.
According to CNBC information, a class action lawsuit was filed against celebrities in the U.S. District Court in California last Friday, relating to EthereumMax’s promotional and marketing actions.
According to the lawsuit, New York resident Ryan Huegerich and other investors bought the cryptocurrency between May and June last year. This was thanks to announcements made by Kim Kardashian and Floyd Mayweather. Both are accused of engaging in behavior that resulted in financial losses for investors.
Kim kardashian and EthereumMax
In June 2021, Kim Kardashian posted a story to her over 278 million Instagram followers about EthereumMax. “Do you like cryptocurrencies???” the influencer breathed while referring to the token.
In the message, she states that the disclosure would not be financial advice. Additionally, she included the hashtag “#ad” implying that she was being paid to publicize the project.
Floyd Mayweather and EthereumMax
Floyd Mayweather promoted EthereumMax in June, hooking it up while announcing his fight with YouTuber Logan Paul. Additionally, cryptocurrency was used as a way to pay for tickets to the event.
According to the process, this would have significantly increased trading and demand for the token. Mayweather even returned to promote the asset at a bitcoin (BTC) conference held in Miami, getting booed by the audience afterwards.
It’s worth noting that this isn’t the first time the former boxer has been embroiled in trouble in the crypto market. In 2018, he found himself in trouble with the SEC. According to a local authority, he paid a $600,000 fine to get rid of the charges.
Kim Kardashian’s role in the alleged fraud also caught the the attention of regulators before. In September last year, the chairman of the UK’s Financial Conduct Authority, Charles Randell, used the post referencing EthereumMax as an example of how influencers are paid to advertise suspicious projects.
The project is accused of a coup
Losing around 97% of its value since June, EthereumMax is accused of operating a “pump and dump” scheme, also known as an exit scam. In this type of scam, the creators of an asset artificially inflate its price to attract new investors.
When the cryptocurrency reaches desirable appreciation and demand, its creators, who own most of the supply of the asset, drop large orders and disappear with the profits. The project then ceases to be developed, leaving the new investors with significant losses.
The process also points out that despite its name, EthereumMax has no connection with Ethereum (ETH). The name is said to be an attempt by scammers to trick investors into believing that the token is part of the ecosystem of the second largest cryptocurrency in the world.
According to at CoinMarketCap data, EthereumMax has a market value of $26.6 million, with less than $150,000 in daily trading volume. Being traded primarily on Uniswap, the asset has accumulated a 33% decline over the past 30 days.
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