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Kim Kardashian sued in crypto ‘pump and dump’ case

Kim Kardashian sued in crypto 'pump and dump' case
Written by publishing team

Kim Kardashian in a golden dress

Kim Kardashian is among three celebrities sued by investors in the EthereumMax cryptocurrency.

Other defendants include boxer Floyd Mayweather Jr., basketball player Paul Pierce and coin makers.

The lawsuit alleges that celebrities collaborated with EthereumMax in order to “misleading promotion and sale” of the cryptocurrency.

EthereumMax said it has disputed the allegations and is looking forward to revealing the truth.

Despite its name, EthereumMax has no legal or commercial relationship with the Ethereum cryptocurrency.

lost investments

The class action alleges that EthereumMax operated a “pump and dump” scheme – whereby misleading marketing is used to inflate the price of an asset and then sell it to unaware investors for a profit.

The complaint, filed with the California District Court, alleges that “company executives, who cooperate with several well-known promoters,” provided “false or misleading statements to investors about EthereumMax, through social media advertising and other promotional activities.”

The defendants promoted the ability of “investors to generate significant returns,” it claimed, resulting in an artificial increase in the price of the cryptocurrency, “which prompted investors to buy these money-losing investments at inflated prices,” thus empowering the EthereumMax executives referred to in the legal action. From “Selling Emax Tokens to Investors for a Profit.”

In plain terms, EthereumMax’s entire business model is based on the use of ongoing marketing and promotional activities, often from “trusted” celebrities, to deceive potential investors into trusting financial opportunities, the court filing claims.

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It alleges that former NBA player Mr. Pierce promoted EthereumMax in a “widely discussed” post on Twitter, in May 2021, “praising EthereumMax’s ability to make money for it.”

Meanwhile, EthereumMax has begun using former world champion Mayweather’s boxing match with YouTuber Logan Paul to promote the cryptocurrency.

Mr. Mayweather is also said to have promoted EthereumMax at a crypto conference.

Finally, the reality TV personality, Kim Kardashian, alleged the complaint, posted on Instagram, saying, “This is not financial advice but is sharing what my friends told me about the EthereumMax token.”

The head of the UK’s Financial Conduct Authority, Charles Randle, later said that Kardashian had “asked her 250 million followers to speculate on cryptocurrencies”, suggesting that the post – marked as an ad – might have been a “financial promotion with the single largest audience reach in the world”. Date “.

“all low”

At the time, EthereumMax told BBC News that its marketing and PR efforts were “always from an educational perspective and discouraged buying – because Kim K’s post was simply meant to raise awareness of the project and its usefulness”.

“It is our intention that our marketing and public relations efforts will encourage people to research our project … before making a decision,” she said.

“This approach requires a lot of time, energy and resources and is in stark contrast to the rapid pumping and emptying schemes out there.”

However, the promotion caused the coin to increase in value to more than 1,300% over its initial price before dropping to its “all-time low” a little more than a month into Ms Kardashian’s position, the court alleges, allowing defendants to “discharge EthereumMax tokens “for big profits” while many of those who bought the coins lost out during this period.

* A deceptive novel

The claim calls the plaintiffs in the case those who invested between May 14 and June 27, 2021 and were “damaged by it.”

EthereumMax denied these allegations.

Steve Gentile, who is identified in the filing as the ‘co-founder/creator of EthereumMax’, told BBC News: “The misleading narrative associated with recent claims is riddled with misinformation about the EthereumMax project.

“We oppose the allegations and look forward to revealing the truth.”

BBC News has sought comment from Kardashian, Mr Mayweather and Mr Pierce.

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