Kim Kardashian and Floyd Mayweather are being sued over allegations that they misled investors when promoting a cryptocurrency, EthereumMax, to their social media followers. A class-action lawsuit filed in the U.S. District Court for the Central District of California claims that EthereumMax operated a pump and dump scheme, where misleading marketing is used to inflate the price of an asset then sold to unwitting investors at a profit.
Read more: Turkey is investigating a cryptocurrency scam worth $2 billion
Kim Kardashian and Floyd Mayweather promoted EthereumMax with a deceptive narrative
Kim Kardashian promoted EthereumMax in a June 2021 post on Instagram, where she wrote; “Are you guys into crypto?” This is not financial advice but I wanted to share what my friends just told me about the Ethereum Max token!” She included the #AD hashtag to show the post was a paid advertisement. In June, Floyd Mayweather promoted EthereumMax on his boxing trunks during a widely viewed fight with YouTube star Logan Paul.
Meanwhile, EthereumMax dismissed the allegations in a statement made via the company’s Twitter account. The statement reads; “The deceptive narrative associated with the recent allegations is riddled with misinformation about the EthereumMax project. We dispute the allegations and look forward to the truth coming out.”
The deceptive narrative associated with the recent allegations is riddled with misinformation about the EthereumMax project. We dispute the allegations & look forward to the truth coming out. Thank you #EMAX community for all of your ongoing support. #EthereumMax pic.twitter.com/RwML01cM4M
— EthereumMax ✪ (@ethereum_max) January 12, 2022
The pump and dump scheme
EthereumMax has lost around 97% of its value since early June, leading some investors to label it as a pump and dump scheme where scammers attempt to boost the price of an asset through false or misleading statements. In 2018, Mayweather was charged by the U.S. Securities and Exchange Commission for pumping an initial coin offering, a controversial crypto crowdfunding method. He had to pay over $600,000 in a settlement with the SEC, without accepting or denying the accusation.
Source: CNBC
