Kim Kardashian And Floyd Mayweather Sued Over Alleged ‘Pump And Dump’ Scam
Kim Kardashian and Floyd Mayweather are being sued by investors who say they were duped into a cryptocurrency scam.
The lawsuit, which also names former NBA star Paul Pierce, alleges that the ‘pump-and-dump’ scheme saw Kardashian and co. promote EthereumMax cryptocurrency tokens on their Instagram pages, before selling off their own holdings of the tokens after their value had been inflated by the increased investment.
The celebrities were reportedly paid in tokens for their endorsement, selling them for profit while investors were left to deal with losses.
Court filings claim:
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.
In an Instagram post dated June 14, Kardashian posted to her 250 million 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.’
According to a survey conducted by Morning Consult, 21% of all American adults and nearly half of cryptocurrency owners saw the ad, with 19% of survey respondents saying they’d invested in Ethereum Max as a result.
‘This meteoric rise did not last long, and EthereumMax began to deflate immediately after Defendant Kardashian’s post,’ the lawsuit states.
Mayweather was also involved in various promotions with the company, including offering fans the chance to win signed boxing gloves if they used EthereumMax to purchase tickets for his fight with Logan Paul.
The class-action lawsuit, which was filed in New York, seeks to represent people who bought tokens between May 14 and June 27 2021, claiming that executives at EthereumMax conspired with celebrities to ‘misleadingly’ promote an ‘allegedly fraudulent business model,’ per The Hollywood Reporter.
Kardashian and Mayweather have not commented on the lawsuit, and it’s not clear how much they made from the endorsements.
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CreditsThe Hollywood Reporter
The Hollywood Reporter