Several celebrities – including Kim Kardashian, Floyd Mayweather Jr., and Paul Pierce – are facing a heavy class-action lawsuit for allegedly promoting a pump and dump crypto scam known as Ethereum Max.
Mayweather and Other Celebs Face Class-Action Suit Over Ethereum Max
Court documents were filed against the three last Friday in a U.S. District Court for the Central District of California. In addition to the three celebrity spokespeople, the co-founders of Ethereum Max have also been named in the suit. All are accused of making misleading or false statements about the asset through social media and other promotional platforms.
Kardashian, Mayweather, and Pierce are accused of telling all their social media followers to invest in the currency. Once everyone bought in and the price inflated, the three decided to sell their stashes. A complaint was filed between the dates of May 14, 2021, and June 27, 2021, by New York resident Ryan Huegerich. According to the complaint, the investor lost quite a bit of money.
A spokesperson for Ethereum Max says that the company is disputing the allegations and explained in an interview:
The deceptive narrative associated with the recent allegations is riddled with misinformation.
Mayweather promoted the currency during a 2021 boxing match he had with YouTube star Logan Paul, while Pierce – a sports commentator – promoted the asset on Twitter during a scrape he was having with sports channel ESPN, a former employer. Kardashian promoted the currency on her Instagram page, which prompted the U.K. Financial Conduct Authority (FCA) to get involved. While they did not penalize the reality star, they did flag the post, and fought back when she tried to explain that it was simply an ad.
Charles Randell – head of the FCA – mentioned:
She didn’t have to disclose that Ethereum Max — not to be confused with Ethereum — was a speculative digital token created a month before by unknown developers, one of hundreds of such tokens that fill the crypto exchanges.
A Rocky Promotional History in the World of Crypto
At the time, it was believed the message posted by Kardashian was the most followed crypto-based Instagram post in history, as the celebrity presently boasts nearly 300 million Instagram followers. Randell further explained:
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.
This isn’t the first time Floyd Mayweather has been charged with inappropriate promotion of a crypto project. Several years ago, he – along with music producer DJ Khaled – were charged by the Securities and Exchange Commission (SEC) with promoting initial coin offerings (ICOs) without revealing to their audiences and followers that they had received promotional fees. Both were required to pay hundreds of thousands of dollars in penalties.