Crypto promotion lands Hollywood celebs in court
A number of Hollywood darlings are being sued by an investor over their role in promoting cryptocurrency Ethereum Max, which soared with their backing over the summer but plunged after the hype died out.
A class-action complaint regarding the controversial cryptocoin was filed last Friday in the US District Court for the Central District of California. The action is against reality TV star Kim Kardashian, boxer Floyd Mayweather and former basketball pro Paul Pierce, as well as the co-founders of Ethereum Max and several others. It was filed by New Yorker Ryan Huegerich on behalf of himself and other investors who acquired Ethereum Max tokens amid celebrity endorsement in mid-2021 and lost their money after the coin dropped over 70% in the following months.
The complaint alleges that the crypto coin in question is a “speculative digital token created by a mysterious group of cryptocurrency developers” and blasts the celebs for misleading millions of their social media followers into buying the shady cryptocurrency to boost its price. The case is referred to as a cryptocurrency “pump and dump” scam, where the coin price is artificially inflated only to make profit from a sell-off later.
“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. In truth, defendants marketed the EMAX Tokens to investors so that they could sell their portion of the float for a profit,” the complaint read.
The founders of Ethereum Max have rejected the allegations, with the company spokesperson stating that “the deceptive narrative associated with the recent allegations is riddled with misinformation,” as cited by the Wall Street Journal. Representatives for the celebrities did not respond to requests for comment.
Ethereum Max had its first share of the spotlight when Floyd Mayweather wore a shirt with the currency’s name on it to the 2021 Bitcoin Conference in Miami. The token also sponsored his boxing match with YouTube celebrity Logan Paul. Former NBA star and sports commentator Paul Pierce promoted the coin on his Twitter account, writing “I got @ethereum_max I made more money with this crypto in the past month than I did with y’all [ESPN sports channel] in a year.” Kim Kardashian promoted the coin in multiple videos on her Instagram, where she has 278 million followers. Her 2021 post asking followers to join “the Ethereum Max Community” was dubbed “the financial promotion with the single biggest audience reach in history” by the head of the UK’s Financial Conduct Authority, Charles Randell.
Ethereum Max quickly rose in value following this hype. In June, the token peaked at an all-time high of $0.000000597636 apiece, but it lost all of its value after the promotional wave subsided, now trending low at $0.00000002 with a 24-hour trading volume of some $57,000, according to Bitcoinist.
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