Kim Kardashian and Floyd Mayweather are being sued for promoting a cryptocurrency on social media that has been accused of being a pump and dump scam.
Kardashian and Mayweather, along with former Celtics star Paul Pierce, were named as “promoter defendants” in a class action lawsuit against cryptocurrency EthereumMax.
The filing alleges that they made “false or misleading statements” to their vast amounts of fans and followers to drive up the cost of the tokens.
The coin’s executive team, Steve Gentile, Giovanni Perone, and Justin French, were named as co-defendants in the suit for allegedly “disguising” the percentage of the tokens they owned and marketing the currency to “investors so that they could sell their portion” for “substantial profits.”
Pierce promoted EthereumMax on May 26, 2021, during a Twitter beef with ESPN after he was fired. “ESPN I don’t need you. I got EthereumMax,” he tweeted to his 4 million followers, along with a link to the coin. “I made more money with this crypto in the past month then [sic] I did with y’all in a year.”
The next day, EthereumMax issued a press release that the token was the only cryptocurrency accepted at the Floyd Mayweather vs. Logan Paul boxing event on June 6th.
Users were incentivized with discounts, ringside tickets, Mayweather signed boxing gloves, and a drawing for a private table at the Mayweather after-party for making purchases of more than $5,000 with the token.
Mayweather promoted EthereumMax at the “Bitcoin 2021” conference on June 4th, wearing a t-shirt emblazoned with their logo, and telling a panel crowd that he believed “there’s gonna be another cryptocurrency just as large as Bitcoin some day,” for which he was booed off the stage.
Kardashian entered the fray on June 14, when she hyped the coin to her 250 million followers on Instagram. “Are you guys into crypto????” she wrote. “This is not financial advice but sharing what my friends just told me about the Ethereum Max token!”
“A few minutes ago EthereumMax burned 400 trillion tokens – literally 50% of their admin wallet giving back to the entire E-max community,” she added.
Kardashian was called out by U.K.‘s Financial Conduct Authority for asking her followers to “speculate on crypto tokens by ‘joining the Ethereum Max Community,’” in what “may have been the financial promotion with the single biggest audience reach in history.”
The lawsuit alleges that investors who purchased the tokens between May 14, 2021, and June 17, 2021 suffered losses when the coin tanked 97% in June, after the celebrities promoted it.