Kim Kardashian and former boxer Floyd Mayweather are being prosecuted for promoting a little-known cryptocurrency accused of fraud.
According to Info from CNBCLast Friday, a class action was filed in the US District Court in California against celebrities in connection with the promotional and marketing actions of EthereumMAX.
According to the lawsuit, New York-based Ryan Hughrich and other investors allegedly bought the cryptocurrency between May and June of last year. This was thanks to announcements made by Kim Kardashian and Floyd Mayweather. Both are accused of adopting such conduct which caused financial loss to the investors.
Kim Kardashian and ethereummax
In June 2021, Kim Kardashian posted a story about EthereumMax to her over 278 million Instagram followers. “Do you like Cryptocurrencies?????” The influencer took a breath while mentioning the token.
In the post she says that disclosure would not be financial advice. In addition, she included the hashtag “#ad”, implying that she was being paid to publicize the project.
Floyd Mayweather and ethereummax
Floyd Mayweather promoted Ethereummax in June, announcing his fight with YouTuber Logan Paul while plugging it. Also, cryptocurrency was used to pay for tickets to the event.
Process wise, this will dramatically increase the demand for trades and tokens. Mayweather also returned to promote the asset during a conference on Bitcoin (BTC) held in Miami, followed by cheers by the public.
It is worth noting that this is not the first time that the former boxer has been involved in problems in the crypto market. In 2018, he found himself in trouble with the SEC. According to a local authority, he paid a $600,000 fine to get rid of the charges.
Kim Kardashian’s role in alleged fraud have also caught The attention of the regulators first. In September last year, the chairman of the UK Financial Conduct Authority, Charles Randall, used the post to refer to EthereumMAX as how influential people were being paid to announce dubious projects.
Project is accused of coup
Having lost nearly 97% of its value since June, EthereumMax is accused of operating a “pump and dump” scheme, also known as an exit scam. In this type of scam, the creator of the asset artificially inflates its price to attract new investors.
When the cryptocurrency attains a desirable appreciation and demand, its creators, who own most of the asset’s supply, dump large sell orders and disappear with the profits. The project then stops developing, causing major losses to new investors.
The process also highlights that despite its name, EthereumMax has no affiliation with Ethereum (ETH). The name is reportedly an attempt by scammers to trick investors into believing that the token is part of the ecosystem of the world’s second largest cryptocurrency.
according To According to CoinMarketCap data, EthereumMax has a market cap of $26.6 million with a daily trading volume of less than $150,000. The asset is down 33% over the past 30 days, mainly traded on Uniswap.
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