Kim Kardashian, Floyd Mayweather, and Paul Pierce face a federal lawsuit that alleges they deceived investors in a pump-and-dump cryptocurrency scam.
The lawsuit accuses executives at EthereumMax of collaborating with the celebrities to urge fans to buy the coins. The celebs were reportedly paid in tokens for their endorsement. The cryptocurrency crashed, but not before its creators made a lot of money.
The lawsuit filed Friday in California claims the EMAX creators inflated the coin’s value before selling off their shares, making large sums of money. At the same time, investors were left with nothing once it crashed.
“Defendants touted the prospects of the Company and the ability for investors to make significant returns due to the favorable ‘tokenomics’ of the EMAX Tokens,” the lawsuit reads. “In truth, Defendants marketed the EMAX Tokens to investors so that they could sell their portion of the Float for a profit.”
In June, Kardashian promoted EthereumMax in an Instagram post.
“Are you guys into crypto???? This is not financial advice but sharing what my friends just told me about the Ethereum Max token!” the post read. “A few minutes ago Ethereum Max burned 400 trillion tokens—literally 50% of their admin wallet, giving back to the entire e-max community. Swipe up to join the e-max community.”
The lawsuit claims that Kardashian’s post had immense reach, considering she has 250 million followers. The price of the token rose 1,370 percent following the post.
“This meteoric rise did not last long, and EthereumMax began to deflate immediately after Defendant Kardashian’s post,” the filing reads. “On July 15, the price of the EMAX Token hit its all-time low: $0.000000017 per unit, a 98% drop from which it has not been able to recover.”
Similarly, Paul Pierce and Floyd Mayweather promoted EthereumMax.
The complaint accuses the defendants of violating state consumer protection laws, common law over aiding and abetting, and unjust enrichment. The class-action suit seeks to represent investors who purchased the tokens between May 14 and June 27.
