Kim Kardashian, Floyd Mayweather, and former NBA star Paul Pierce are just three of the celebrities currently facing some potential legal hot water surrounding their involvement in a cryptocurrency called EthereumMax. The lawsuit alleges that they all made various false or misleading statements to investors about EthereumMax through social media advertisements and other promotional activities, and now they're potentially on the hook for damages.
The founders of the cryptocurrency are among those named in the class-action lawsuit, filed in the U.S. District Court for the Central District of California. According to that suit, the EthereumMax cryptocurrency is a speculative digital token created by a mysterious group of cryptocurrency developers, and that by promoting it, the celebrities in question were allegedly guilty of participating in a classic financial scheme.
This situation is often referred to as a "pump and dump," where the public is convinced to buy a certain stock or, in this case, cryptocurrency, driving up the price. Afterward, the celebrities and public figures doing the convincing unload their own stock, make a bundle, and leave the investors holding the now devalued asset. Essentially, this is what the people named in this lawsuit are accused of doing by a group of complainants who lost money on the crypto, headed by investor Ryan Huegerich.
Anyone who lost money on EMAX tokens between May 14, 2021, and June 27, 2021, can take part in the class action suit. However, according to a company spokesperson for the cryptocurrency, the lawsuit is based on a deceptive narrative that is riddled with misinformation.
Kim Kardashian made an Instagram post asking followers to invest in EMAX last year, a post that already earned her some negative attention from the U.K.'s Financial Conduct Authority. Floyd Mayweather took the opportunity to promote the token at a 2021 boxing match with Logan Paul, while Paul Pierce promoted the token on his Twitter account.
Time will tell whether they might now be on the hook for serious damages as a result of those actions.
What You Will Learn
- Understanding the allegations against celebrities promoting EthereumMax.
- Recognizing the implications of "pump and dump" schemes in cryptocurrency.
- Identifying the potential legal consequences for social media endorsements.
- Learning how to participate in class action lawsuits for financial recovery.
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