Things just got a little hectic in the cryptocurrency space for some familiar faces, including Floyd Mayweather.
According to Hollywood Reporter, Floyd Mayweather, along with Paul Pierce and Kim Kardashian are being sued for their alleged involvement in an investor cryptocurrency scam, which claims the celebs misled followers in a pump-and-dump scheme.
Details from the lawsuit allege that Kardashian, Mayweather, and Pierce convinced their fans to purchase EthereumMax tokens and ended up selling them once the value was inflated. Findings also revealed that the superstars were supposedly paid in tokens for their sponsorships and walked away well-off while the investors were left to carry the burden of the actual bag.
“Defendants touted the prospects of the Company and the ability for investors to make significant returns due to the favorable ‘tokenomics’ of the EMAX Tokens,” read the lawsuit filed Friday in California federal court. “In truth, Defendants marketed the EMAX Tokens to investors so that they could sell their portion of the Float for a profit.”
Filed on behalf of a New York resident by John T. Jasnoch of Scott + Scott Attorneys at Law LLP, according to The Hollywood Reporter, the class action lawsuit looks to represent individuals who purchased tokens between May 14 and June 27, 2021.
However, the celebrities aren’t the only ones facing scrutiny under the lawsuit. The complaint also accuses EthereumMax of operating under a fraudulent business model. They allegedly conspired with the stars to promote its token in a misleading way to encourage people to purchase. On the flip end, they are also being accused of encouraging those involved in the scheme to sell their interest once the value of the tokens had been artificially inflated.
Influence Gone Wrong
All three celebs have an impressive following on social media, thus making them the perfect candidates to encourage people to get involved in the alleged scheme.
For example, Reuters reports that Kardashian posted an ad for EthereumMax onto her Instagram profile in June of 2021 (Note: the company has no connection whatsoever to the actual cryptocurrency, Ethereum).
“Are you guys into crypto????” read the post. “This is not financial advice but sharing what my friends just told me about the Ethereum Max token! A few minutes ago Ethereum Max burned 400 trillion tokens—literally 50% of their admin wallet, giving back to the entire e-max community. Swipe up to join the e-max community.”
This particular post is outlined in the lawsuit due to its tremendous reach. Financial services company, Morning Consult, conducted a research study that revealed that up to 21 percent of all American adults and close to half of all cryptocurrency owners were exposed to the ad. As a result, the findings show that 19 percent of respondents invested in EthereumMax due to the post.
“This meteoric rise did not last long, and EthereumMax began to deflate immediately after Defendant Kardashian’s post,” the complaint says. “On July 15, the price of the EMAX Token hit its all-time low: $0.000000017 per unit, a 98% drop from which it has not been able to recover.”
Not only did Kardashian’s post make the details in the lawsuit, but a Twitter post from Pierce also garnered similar results.
Furthermore, according to reports, both Mayweather and Kardashian have previously faced legal action due to their promotion of various products that have caused harm to the community, including a morning sickness drug promoted by Kardashian in 2015. For Mayweather, it was his involvement in a previous cryptocurrency scheme.
Neither Kardashian, Mayweather, nor Pierce have responded to the allegations.