A class action suit has been filed against the promoters of a digital token together with reality star Kim Kardashian, boxer Floyd Mayweather Jr. and former NBA All-Star Paul Pierce in the U.S. District Court for the Central District of California. These celebrities have been sued as it is alleged that they made “false and misleading statements” about crypto EthereumMax, on social media, which lead to huge losses for investors who invested in the digital token.
EthereumMax is a little known digital token. It has no relation with Ethereum, which is the second most valuable coin after Bitcoin. The crypto received a huge boost between May and June as it was promoted by Kim Kardashian, Floyd Mayweather Jr. and Paul Pierce. However, it soon crashed to historic lows and it was called a “pump and dump scheme.”
The digital token’s value was artificially inflated through advertisements on social media and more by promoters, celebrities and influencers. Then, people who had huge investments in these coins dumped these cryptos in the market after artificially “pumping” up their value. This ploy is called a “pump and dump scheme.”
EthereumMax has lost roughly 97 percent of its value since early June, according to a report by CNBC. This is why some investors called it a “pump and dump scheme” and celebrities with millions of followers such as Kim Kardashian, Floyd Mayweather and Paul Pierce spoke of the coin and advertized it initially raising its value and then large promoters dumped huge volumes in the market, making a profit. Now the token is at three percent of its earlier value.
Kim Kardashian praised the cryptocurrency EthereumMax in social media posts on her Instagram Stories in June. The Keeping Up With the Kardashians star has more than 250 million followers on Instagram.
During this time Charles Randell, who is the head of the United Kingdom’s Financial Conduct Authority (FCA) cautioned that the EthereumMax was “a speculative digital token created a month before by unknown developers.”
Floyd Mayweather endorsed the digital coin during his match with Logan Paul, on his boxing shorts. Tickets to the event could also be purchased using EthereumMax which the suit says helped to increase trading volumes.
Representatives of Kim Kardashian, Floyd Merryweather and EthereumMax have not responded, when asked for comment by various outlets.