Kim Kardashian and Floyd Mayweather are being sued for allegedly tricking cryptocurrency investors in a pump-and-dump scheme. The lawsuit claims that the celebrities deceived their followers for personal profit by encouraging them to purchase EthereumMax (EMAX) tokens, only to cash out once their price was inflated, according to Reuters.
“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,” reads the lawsuit filed last week in California federal court. “In truth, Defendants marketed the EMAX Tokens to investors so that they could sell their portion of the Float for a profit.”
Kardashian and Mayweather were reportedly compensated for their sponsorships in EMAX tokens, according to The Hollywood Reporter. Kardashian shared the following post with her 250 million Instagram followers:
“Are you guys into crypto???? This is not financial advice but sharing what my friends just told me about the Ethereum Max token! A few minutes ago Ethereum Max burned 400 trillion tokens—literally 50% of their admin wallet, giving back to the entire e-max community. Swipe up to join the e-max community.”
Charles Randall, chair of the UK’s Financial Conduct Authority, described the post as a “financial promotion with the single biggest audience reach in history.”
According to a Morning Consult survey, the ad reached up to 21 percent of all adults nationwide and over 30 percent of cryptocurrency owners. Around 19 percent of those who saw the post subsequently invested in EthereumMax. The recent lawsuit aims to represent people who purchased EMAX tokens between May 14 and June 27 of last year.
