Kim Kardashian and Floyd Mayweather are being sued over allegations they misled buyers when selling a little-known cryptocurrency known as EthereumMax to their hundreds of thousands of social media followers.
A category motion lawsuit filed final Friday within the U.S. District Court docket for the Central District of California accuses EthereumMax and its celeb promoters of working collectively to artificially inflate the value of the token by making “false or deceptive statements” in social media posts.
Kardashian brought on a stir final yr when she made an Instagram publish selling the EthereumMax token. “Are you guys into crypto????” Kardashian wrote. “This isn’t monetary recommendation however sharing what my associates simply informed me in regards to the Ethereum Max token!”
Kardashian included the hashtag #advert within the message, suggesting she was paid to market it. It’s not clear if Kardashian was paid by EthereumMax, although estimates have positioned her price per sponsored Instagram publish within the $500,000 to $1 million vary.
In the meantime, Mayweather endorsed the token in his boxing match with YouTube star Logan Paul. EthereumMax was accepted as cost for tickets to the occasion, a transfer the lawsuit claims boosted buying and selling volumes sharply.
Mayweather additionally promoted EthereumMax at a significant bitcoin convention in Miami, and was subsequently booed off stage. Mayweather doesn’t seem to have disclosed cost for his promotion of the token, the lawsuit mentioned.
The lawsuit claims that plaintiff Ryan Huegerich, a New York resident, and different buyers who bought EthereumMax tokens between Might 14, 2021, and June 17, 2021, suffered losses on account of the celebrities’ conduct.
EthereumMax has misplaced round 97 % of its worth since early June, main some buyers to label it as a “pump and dump” scheme the place scammers try to spice up the value of an asset via false or deceptive statements. The accusation options in Huegerich’s lawsuit, which accuses Kardashian and Mayweather of “shilling” EthereumMax.
EthereumMax “has no connection” to ether, the second-largest cryptocurrency, the lawsuit mentioned, including its branding seems to be an effort to mislead buyers into believing the token is a part of the Ethereum community.
Representatives for Kardashian and Mayweather weren’t instantly accessible when contacted by CNBC. EthereumMax didn’t return a request for touch upon Twitter.
It’s not the primary time celebrities have been in scorching water for cryptocurrency endorsements — a lot to the ire of regulators.
In 2018, Mayweather was charged by the U.S. Securities and Trade Fee with pumping an preliminary coin providing, a controversial crypto crowdfunding technique. Mayweather paid over $600,000 in a settlement with the SEC, with out admitting or denying the regulator’s findings.
In September 2021, Charles Randell, chair of the U.Okay.’s Monetary Conduct Authority, singled out Kardashian’s Instagram advert for EthereumMax in a speech warning about crypto scams. Randell mentioned that whereas he couldn’t say if EthereumMax particularly was a rip-off, “social media influencers are routinely paid by scammers to assist them pump and dump new tokens on the again of pure hypothesis.”