Kim Kardashian, Floyd Mayweather, and the Boston Celtics’ Paul Pierce could all be heading for court after a New York-based crypto investor accused them of playing part in the EthereumMax pump and dump.
As reported by Law360, Ryan Huegerich filed a class action in a California court, alleging that the team behind EthereumMax leveraged “trusted celebrities” to promote and artificially inflate the price of EMAX tokens in May and June last year.
Huegerich claims co-founders Giovanni Perone and Steve Gentile talked up the power of EthereumMax’s “tokenomics,” a catch-all term how cryptocurrencies incentivize investors and reward holders.
The project was effectively a clone of crypto-powered Ponzi game SafeMoon. It penalized token holders for actually using their crypto and promised to burn supply — a bid to project value through rising scarcity (it didn’t work).
Once they’d attracted enough buyers, Perone and Gentile allegedly offloaded their personal holdings to starstruck followers.
“The promoter defendants’ improper promotional activities generated the trading volume needed for all the defendants to offload their EMAX tokens onto unsuspecting investors,” said Huegrich.
“While plaintiff and class members were buying the inappropriately promoted EMAX tokens, defendants were able to, and did, sell their EMAX tokens during the relevant period for substantial profits.”
Huegerich is hoping to represent hundreds of investors who bought into EMAX between May 14 and June 17 last year.
Almost $600 million worth of EMAX was traded between those dates, according to CoinGecko. The price also briefly surged up to 1,000% before collapsing nearly 99%.
Kim Kardashian asks Instagram fans: ‘Are you into crypto?’
Judging by the effect Mayweather and Pierce’s messages had on EMAX’s price, the team’s strategy certainly appears to have worked.
Pierce began shilling EMAX just weeks after he was fired by ESPN for posting a video to his Instagram account in which he’s seen drinking, smoking marijuana, and cavorting with strippers.
At the same time, EthereumMax announced that it would be the only crypto boxing fans could use to buy tickets for the upcoming Floyd Mayweather vs. Logan Paul fight.
However, by the time Kardashian advertised the shoddy token on Instagram in mid-June, EMAX had already lost much of its lustre.
“Are you guys into crypto?” she asked her 250 million Instagram followers.
“This is not financial advice but sharing what my friends just told me about the Ethereum Max token,” Kardashian continued, before boasting that EMAX had just burned 400 trillion tokens without context.
Unfortunately for the reality star-turned-business mogul (and anybody she reeled in), EMAX bombed nearly 70% in the days following her message. It’s now practically worthless.
But if the class action succeeds in bringing Mayweather to justice, it would be the boxing superstar’s second run-in for illegally touting cryptocurrencies.
In November 2018, the SEC charged Mayweather and professional hypeman DJ Khaled with spruiking failed crypto project Centra Tech without disclosing they’d been paid, charges they settled.
Looking for bite-sized news? We’re on Twitter.