Investors who invested in the cryptocurrency EthereumMax (EMAX) are being sued by a number of celebrities, including TV star and wife of rapper Kanye West Kim Kardashian. She is accused of promoting a fraudulent crypto project that caused depositors to lose money.
In a lawsuit filed in U.S. District Court in California on Jan. 7, Ryan Hugerich said the crypto project turned out to be a “pump and dump” scheme on behalf of all victims. According to him, the stars listed as defendants profited from their fans and investors.
The scheme typically involves two stages. First, the scammers create a stir around their cryptocurrency and on this wave artificially raise its rate by buying up large orders on their own – the “pumping” or pumping stage. When investors come to the project, the organizers sell their assets at an inflated value, bringing the cryptocurrency rate down to its original levels — the “dump” or dump stage.
Hugerich is urging a judge to order celebrities to compensate investors for failed investments. In addition to the Kardashians, he wants money from world boxing champion Floyd Mayweather Jr. and NBA champion Paul Pierce, as well as EthereumMax founders Steve Gentile and Giovanni Perrone.
Kim Kardashian promoted EthereumMax (EMAX) in a post on her Instagram page
The lawsuit states that Kim Kardashian promoted EthereumMax in a post on her Instagram page in June 2021, when she had 250 million followers. In the posted post, the TV diva noted that the information she provided was not an investment recommendation and included the hashtag “advertisement.”
And Mayweather promoted EthereumMax during a June fight with blogger Logan Paul. The logo and name of the cryptocurrency were displayed on the boxer’s boxing shorts.
Representatives of the boxer and the socialite did not comment on the lawsuit. However, EthereumMax representatives have denied allegations of fraud.
“The false statements associated with the recent allegations are permeated with misinformation about the EthereumMax project. We dispute the allegations and look forward to shedding light on the truth,” the company said.
According to CoinMarketCap, EthereumMax began trading on May 16, 2021 at $0.00000006 per coin. On May 29, its value jumped by more than 1000%, after which it began to gradually decline and eventually fell below the initial rate. As of January 12, the altcoin exchange rate is $0.0000000016.
Floyd Mayweather is not the only boxer accused of promoting crypto projects. In December 2021, champion super heavyweight Tyson Fury promoted the cryptocurrency Floki Inu, for which subscribers accused him of venality.