As the U.S. Securities and Exchange Commission (SEC) cracks down on celebrities who previously endorsed fraudulent cryptocurrency, another speculation has arisen.
VirtualStax is under investigation for allegedly misleading people to be a part of its blockchain-based project, which it claims is worth $15 billion, according to Forbes.
In 2019, the South African company stated that fundraising for its VirtualStax digital trading cards would bring in $97 billion.
In addition, CEO and Founder Rudolf Markgraaff allegedly implicitly shared that LeBron James was a part of the project. James’ supposed involvement is what motivated Shaun Kelley, one of the lawsuit’s plaintiffs, to participate in the venture. The former Motocross pro is one of the people that has accused TheXChange — a platform that lists the trading cards — of fraud and for owing them $12 million in unpaid royalties, according to a lawsuit filed in Harris County District Court, per Forbes.
Note: The area in which the court is located is unclear.
Additionally, Kelley claims that he was offered one million TurnCoin — the token that powers VirtualStax — to join the project as a sports ambassador.
“Everybody got misled,” Kelley said, according to Forbes. “They thought LeBron James was in it.”
What’s more, a former TurnCoin employee confirmed to Forbes that Markgraaff had led people to believe James was involved.
A spokesperson for James shared in a statement: “LeBron has never endorsed, invested, or had any relationship with these companies.”
Ahead of the lawsuit, Kansas City Chief Star Patrick Mahomes, former “American Idol” judge Randy Jackson, and Orlando Magic NBA player Wendell Carter Jr. reportedly endorsed VirtualStax’s cards. However, most of the celebrities’ Stax cards have yet to be auctioned and have been delayed for another three months.
According to Forbes, Markgraaff said that its reporting was “either misstated, misunderstood, misrepresented or worse, false.”