Kim Kardashian, Floyd Mayweather Jr. and Paul Pierce promoted a crypto token called EthereumMax last May. A group that invested in the token has now filed a lawsuit against the celebrities and the creators of the coin, saying they were victims of a pump and dump scheme.
The proposed class-action complaint (see below) filed on Friday by investors who bought EthereumMax between May 14, 2021, and June 27, 2021, alleges they were victims of a scam, according to a report from Finbold on Monday. Kardashian, Pierce and Mayweather were named in the lawsuit for promoting the token along with the creators of EthereumMax.
Get the CNET Now newsletter
Spice up your small talk with the latest tech news, products and reviews. Delivered on weekdays.
Kardashian and Pierce publicized the token on their social media accounts while EthereumMax was used to purchase tickets for Mayweather’s fight against Logan Paul on June 6. The suit, filed in US District Court in California, alleges the celebrities were paid to promote the token and refers to a Morning Consult poll from September that showed 19% of Kardashian’s social media followers bought EthereumMax after she posted about it.
EthereumMax began trading on May 16, 2021, at $0.00000006 but then shot up in value by more than 1,000% on May 29, according to CoinMarketCap. It dropped in value the following week and continued to plummet throughout June to less than its starting value.
Crypto pump and dump scams became commonplace last year as creating crypto tokens became easier, celebrities’ influence grew and the number of people looking to get rich quick off crypto increased. Although a token like EthereumMax is worth a tiny fraction of a penny, these schemes involve hundreds of billions of coins created, so any big upswing can result in millions of dollars being created, which is the pump. Then the creators of the coin and promoters sell their billions of tokens, causing the price to freefall and leaving investors with worthless assets. Although this scam is illegal in securities such as stocks, there are currently no legal ramifications for crypto pump and dumps.
The group of investors who filed the suit seek monetary relief for the damages as a result of the alleged scheme.
Kardashian, Mayweather and Pierce didn’t immediately respond to a request for comment.