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Kim Kardashian and Mayweather Jr. Face Pump n’ Dump Crypto Lawsuit

Kim Kardashian has allegedly tricked investors into a cryptocurrency scam involving EthereumMax. She is part of a group of celebrities, including Floyd Mayweather Jr. and Paul Pierce, accused of a “pump n’ dump” scheme.

They convinced millions of their social media followers into buying the digital coin. Then, once its price inflated, they sold their holdings for a considerable, yet illicit, profit.

Some of the victims filed a class-action complaint last Friday in the U.S. District Court for the Central District of California. Now, the famous superstars have to face the investors’ wrath and a potentially lengthy lawsuit.

Misleading Promotions

The crypto lawsuit alleges several celebrities made “false or misleading statements” regarding EthereumMax (EMAX) between May and June 2021. Most of these comments appeared on social media, where hundreds of millions of people follow their every move. For instance, Kim Kardashian tried to convince over 278 million followers into joining “the Ethereum Max Community.”

Former professional boxer Floyd Mayweather Jr. promoted EthereumMax in 2021 during a boxing match with YouTube celebrity Logan Paul. The event attracted overwhelming media attention, which increased the coin’s reliable image among investors.

Former NBA player and sports commentator Paul Pierce also promoted EthereumMax on his Twitter account:

@espn, I don’t need you. I got @ethereum_max. I made more money with this crypto in the past month then [sic] I did with y’all in a year.

Despite its increasing popularity, EthereumMax has no connection with the more famous cryptocurrency, Ethereum. Still, many took the coin’s similar name and the celebrities’ advice as reliable endorsements and invested accordingly.

Unfortunately, once the coin’s price grew by 1,300%, far beyond its initial expectation, the celebrities sold their holdings. Also, everyone who was allegedly in on the con sold their shares. As a result, its value dropped considerably, and the rest of the crypto investors lost money.

Kim Kardashian in Hot Water with U.K.’s Financial Watchdog

It took more than six months to see a legal filing in the U.S. regarding the EthereumMax debacle. However, the U.K. Financial Conduct Authority (FCA) reacted much quicker. The regulatory body operates independently of the U.K. Government and charges fees to the financial services industry members.

Last year and after Kim Kardashian’s Instagram promotion of EMAX, the FCA criticized the celebrity’s crypto influencer role. The regulator’s then-chairman, Charles Randell, said that Ms Kardashian’s posts might “have been the financial promotion with the single biggest audience reach in history.”

Randell continued:

“I can’t say whether this particular token is a scam. But social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation. Some influencers promote coins that turn out simply not to exist at all.”

In the wake of these comments, an EthereumMax representative said that Ms Kardashian’s “post was simply intended to raise awareness of the project and its utility.”

A “Deceptive Narrative”

Ryan Huegerich, a New York resident, filed the complaint on behalf of himself and others who purchased EMAX tokens. The filing only regards purchases between May 14, 2021, and June 27, 2021.

The lawsuit considers EMAX a “speculative digital token created by a mysterious group of cryptocurrency developers.”

Besides the celebrities, these developers are now part of the defendants in the case. Nevertheless, they have disputed the allegations. As part of an EthereumMax company statement, they said, “the deceptive narrative associated with the recent allegations is riddled with misinformation.”

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All celebrities’ representatives have declined to comment on the lawsuit or its allegations. However, more news on this topic should come out soon as the legal proceedings develop.

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